Wyden's New Capital Gains Tax Scheme

Se. Wyden (D, OR) released more details (CNBC, WSJ) of his plan to revise the capital gains tax and apply it to a mark-to-market of some assets. Valuing illiquid assets and non-marketable securities is a puzzle.

Figuring out annual values is straightforward for stocks and other tradable assets but trickier for private businesses, collectibles and commercial real estate.Mr. Wyden proposes to let holders of those illiquid, nontradable assets defer their tax bill until they sell assets or transfer them through gift or death. But they would face an additional charge designed to eliminate the benefit of deferral and the plan outlines options for calculating it.

That will be simple! Does it mean the Koch Brother defers taxes until death? Presumably. I don't see how that will fly with the Dems who are holding out for an annual public flogging.

I had suggested something similar last January. Wyden has lower thresholds now than he had mooted in the past - Warren's wealth tax is meant to kick in at $50MM and Wyden had a figure in mind of $43MM. His new threshold is $10MM of assets, with exclusions of up to $2MM for a residence and $3MM for retirement accounts. So as a practical matter, the threshold will be around $15MM for most (Some tech geek renting a place in San Fran or Manhattan will cash out his IPO at age 26, pocket a bundle and have no exclusions. Bummer, but I'm over it. And the tech geek is over it, too, if he buys an excludable residence.)

I had also noted that to avoid any liquidity crunch for the taxpayer some sort of deferred payment plan would make sense. Wyden is on the same page:

The tax would also apply to built-up gains on existing assets, after a deduction for losses, potentially triggering significant tax bills for billionaires who built their fortunes over the past few decades. That would include the world’s richest person, Amazon.com Inc. founder Jeff Bezos, Mr. Wyden said in an interview Wednesday.

Levies on past gains would be payable over a to-be-determined transition period, perhaps at discounted rates. So someone who bought $20 million of stock in 1990 that is now worth $50 million would face taxes on that $30 million gain. In that sense, Mr. Wyden’s plan resembles a one-time wealth tax President Trump proposed in 1999.

Obviously none of this is happening under Trump and with a Republican Senate, but who knows what 2021 will bring? As to applying the revenue, estimated to be at least $1.5 trillion over then years, Sen. Wyden is staid and lacks the "More Free Everything!" vision of the Dem Presidential candidates. He proposes dedicating the funds to Social Security. Boring! By way of contrast Warren wants to use $700 million of her wealth tax to pay off student loans, because heaven knows young college grads need more financial assistance sent there way than, oh, struggling inner-city school kids.

Well. I think tax hikes are coming and frankly, I'm with Willie Sutton on this one - let's tax where the money is, which is lightly-if-ever taxed capital gains.

Comments

[henry]

Donald J. Trump @realDonaldTrump
10m

Illegal Immigration costs the USA over 300 Billion Dollars a year. There is no reason for this, and things are being set in motion to have this number come WAY DOWN. Democrats could end Loopholes and it would be a whole lot easier, and faster. But it will all happen anyway!....

....VERY stupidly negotiated Trade Deals, and Illegal Immigration, are a tremendous cost and burden to our Country. They are BOTH coming along very well and someday, in the not too distant future, America will see a very positive change. Remember, America First!

[Ignatz Ratzkiwatzki]

I think Abe was assuming a nation of rational thinkers, even if they happened to be at odds with each other.
600,000 died when rational actors couldn't come to terms. How many are going to have to die when half the country is out of its mind?

[Ignatz Ratzkiwatzki]

--Very simple taxes are the best.--

Non existent taxes are the best, along with their corollary, non existent government.

[Ignatz Ratzkiwatzki]

New thread

[jim nj]

Melinda,

That's a day or two old. There is also a report that the intelligence IG's first job was to squelch whistle-blowers.

Neither report looks good for the Obama administration.

[JimNorCal]

Comment from Mel's 10:42
"Good old 'Ruby Ridge' Barr"

What? He helped cover up that one?

[KevlarKid]

jim nj---- use 5 packets to reach 5000 mg. capsules and pills not as effective. drink at nite so your body doesn't excrete.

[MissMarple2]

Melinda,

That extended ski season in Australia is a harbinger for Northern Hemisphere winter approaching.

I hope my daughter gets this job she interviewed for today, as she can ride the new bus system downtown. The only trouble we would have is that in inclement weather I would have to drive her to the stop, but it's only 6 blocks.

MUCH better than trying to drive through snow or ice, plus she wouldn't have to pay for parking.

[KevlarKid]

it was the kind of tripe that Mexican AM stations are playing. i appreciate music from Mexico that is minus the corporate Miracle Whip. and WTF is it doing in an American store?

[KevlarKid]

Kate Steinle's murderer told the court he was shooting at sea lions on the pier at Fisherman's Wharf. that is a felony. no charges brought on that travesty. no idea where that cockbag is these days. maybe the ACLU will put him on their speakers circuit.

[jim nj]

Typhuspad ate another post.

https://www.msn.com/en-us/news/world/satellite-image-shows-isis-infested-island-bombed-by-us-reduced-to-smoking-craters/ar-AAHddor?li=BBnbfcL

I posted on this yesterday. An on the ground force found nothing left.

[jim nj]

Nytol, or good morning, whatever. I'm going to bed.

[Jim Eagle]

Mel,

Eddie Money was a member of our club. He had a big condo on the ocean.

We used to have a strict "no denim" policy in our 19th Hole Bar and Bistro. That never discouraged Eddie who I never saw in anything but denim.

He is at the big travel agency in the sky.

[JimNorCal]

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