The biggest problem wealth taxes proposed by candidates like Elizabeth Warren and Bernie Sanders may face is the constitution itself. Direct taxes like wealth taxes are specifically banned by the constitution. So was the income tax until the 16th amendment allowed it in 1913. Now, progressives are looking for ways to slip a wealth tax by the Supreme Court. Laura Davison and Ben Steverman report for Bloomberg: Democratic presidential candidates Elizabeth Warren and Bernie Sanders want to enact a wealth tax to pay for their large government programs. The biggest barrier may not be Congress, but … [Read more...]
It’s Not Just the Rich Democrats Are After
On The New York Times' Upshot blog, Neil Irwin explains that Democrats' tax plans wouldn't affect just the uber-wealthy, but also many of the high-income professionals who populate the very states Democrats represent. He writes: Much of the Democratic primary race has focused on taxes aimed at the billionaire class — policies devised to reduce inequality and fund progressive goals on health care and education. But there’s also a less discussed tax increase in leading Democratic policy proposals that would affect not just a tiny sliver of the ultra-wealthy, but also millions of high-income … [Read more...]
Liz Warren’s 158% Tax Rate
Remember, your key takeaway here is that millionaires will become the new billionaires if Warren has her way. Here’s how her tax rates reach 158%. Richard Rubin reports in the WSJ: Potential tax rates over 100% could result from the combination of tax increases the Massachusetts senator proposes for the very top tier of investors. She wants to return the top income-tax rate to 39.6% from 37%, impose a new 14.8% tax for Social Security, add an annual tax of up to 6% on accumulated wealth and require rich investors to pay capital-gains taxes at the same rates as other income even if they don’t … [Read more...]
Texans Fight to Protect Their Income from Taxation
Texans are known for their fierce loyalty to their home state, with some even considering themselves Texans first, then Americans. So it's no surprise when Texans band together to protect themselves from outside forces seeking to change the state's character and customs. Thanks to Texas' many years of economic success, people from all over America and beyond have immigrated to the state to participate in its bounty. They have brought with them ideas antithetical to Texas' traditions, including a desire for bigger government. In the face of this foreign influence on their ways, Texans … [Read more...]
Here’s Why Warren’s Wealth Tax Won’t Work
Elizabeth Warren has a plan to pay for all her plans; take wealthy Americans' money. The problem is, other countries have tried just that, and it didn't work. The rich and ultra-rich can move anywhere in the world and hide their wealth there. That's exactly what they have done in other countries that tried to pin them down and take their wealth. Not to mention how difficult wealth taxes are for family farmers, whose wealth is tied up in their land. They are forced to sell parcels each year in order to fund the taxation. Pretty soon, there's no farm left! And certainly no wealth. At … [Read more...]
Here’s Why Sanders’ Tax Plan Could Usher in a Wave of Tax Avoidance
“Enough is enough,” Bernie Sanders said Tuesday. “We are going to take on the billionaire class, substantially reduce wealth inequality in America and stop our democracy from turning into a corrupt oligarchy.” Except there’s one small problem. The billionaire class he’s after would apply to married couples with a net worth of at least $32 million and individuals with $16 million. That’s not the billionaire class. Uncle Bernie’s tax would rise to 8% for married couples with assets of at least $10 billion. Believe me, if he thought being a billionaire was tough, try finding the … [Read more...]
You Can Kiss Your Savings Goodbye if this Happens
Your key to investment success is to align yourself with companies that are aligned with you. What do I mean? When it comes to investment counsel and account management, you want a fiduciary at the helm. By law, a fiduciary must act in your best interests. When it comes to investing your hard-earned money you want to own companies that put you the shareholder or owner at the head of the table. If Elizabeth Warren is elected those two investor rules to live by are thrown out the window as explained below by Phil Gramm and Mike Solon at The Wall Street Journal. Do yourself and your money a … [Read more...]
Here’s Who Benefits from New England’s High Taxes: It’s Not Who You Think
Residents of New England and nearby New York and New Jersey endure some of the nation's highest tax rates (not New Hampshire). With the capping of the State and Local Tax (SALT) deduction on federal taxes, the bad behavior of these states was revealed to everyone. You may think that the federal government and those who want to "tax the rich," are the real winners of the SALT cap, but that doesn't appear to be the case. The tax the rich crowd isn't so keen on taxing the rich when that means themselves. And the federal government is giving away far more in revenue than it's getting with the … [Read more...]
Could This Be the End for the Mortgage Interest Deduction?
For decades the mortgage interest tax deduction has rewarded homeowners at the expense of other taxpayers, but with the 2017 tax reform, much of the benefit for homeowners was eliminated. Most middle class homeowners achieved better tax results by taking the standard deduction, bringing the percentage of taxpayers using the mortgage interest tax deduction down from 21% in 2017 to only 8% in 2018. At Bloomberg, Karl W. Smith suggests the deduction should be eliminated entirely. He writes: After 1986, when Congress eliminated the deductibility of interest on personal loans and increased the … [Read more...]
Can You Guess Where Financial Firms Are Going When they Flee the Northeast’s High Taxes?
If you answered Palm Beach County in Florida, you're right. When tax reform capped state and local tax deduction from federal returns, financial firms and their employees were exposed to the naked truth about the high state taxation in the Northeast. With governments in New York, Massachusetts, and Connecticut drowning in obligations, taxes aren't coming down soon. That's why so many financial firms and employees are voting with their feet and heading for low tax Florida instead. Many wealthy retirees have already made this sound financial choice, and it's no surprise to see profit-making … [Read more...]
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