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- May 27, 2009
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Some Democratic presidential candidates have floated the idea of a new U.S. wealth tax (one version: 2% on net worth > $50M; 3% on net worth > $1B). There are a couple of ways that this tax could be implemented in a future version of everyone's favorite document: IRS Form 1040.
Version 1: each year, every taxpayer is required to report their Section XXX (XXX = a new section of the tax code) net worth.
Problem: for many taxpayers (some of quite modest means), calculating their Section XXX net worth could be a huge burden. Sorry folks - the time and cost required to calculate Section XXX net worth each year could constitute a nasty "tax" on a broad swath of Americans, not just the ultra-weathy. :thumbdown
Problem: the inquisitive bean-counters in the IRS might be delighted at the prospect of requiring every American to cough up a net worth estimate each year, but in my opinion this would be a revolting expansion of government power / intrusion into American life.
Version 2: each year, every taxpayer is required to check a box indicating whether they have Section XXX net worth > $50M. If so, then they report their Section XXX net worth so the corresponding wealth tax can be calculated. Taxpayers who don't check the box don't have to report their Section XXX net worth.
Problem: with this approach, super-wealthy taxpayers could simply not check the box and "dare" the IRS to come after them. Only during an audit would the taxpayer be required to justify their Section XXX net worth claim.
Summary: a warning to Democrats - proposing a wealth tax is a deal-killer for this independent (no party affiliation) voter. :2wave:
Version 1: each year, every taxpayer is required to report their Section XXX (XXX = a new section of the tax code) net worth.
Problem: for many taxpayers (some of quite modest means), calculating their Section XXX net worth could be a huge burden. Sorry folks - the time and cost required to calculate Section XXX net worth each year could constitute a nasty "tax" on a broad swath of Americans, not just the ultra-weathy. :thumbdown
Problem: the inquisitive bean-counters in the IRS might be delighted at the prospect of requiring every American to cough up a net worth estimate each year, but in my opinion this would be a revolting expansion of government power / intrusion into American life.
Version 2: each year, every taxpayer is required to check a box indicating whether they have Section XXX net worth > $50M. If so, then they report their Section XXX net worth so the corresponding wealth tax can be calculated. Taxpayers who don't check the box don't have to report their Section XXX net worth.
Problem: with this approach, super-wealthy taxpayers could simply not check the box and "dare" the IRS to come after them. Only during an audit would the taxpayer be required to justify their Section XXX net worth claim.
Summary: a warning to Democrats - proposing a wealth tax is a deal-killer for this independent (no party affiliation) voter. :2wave:
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