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Billionaires are hoarding trillions in untaxed wealth. They want the Supreme Court to keep it that way
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this post was submitted on 06 Jan 2024
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Just to be clear, we're talking about wealth taxes, not income taxes. Yes, the wealthy have all kinds of avoiding paying fair income taxes. But, this is a different issue, this is a wealth tax.
It's important to realize, that most of the US already has a form of wealth tax: property taxes. The thing is, property taxes are a regressive form of wealth tax. Sure, the poorest people pay no property-wealth tax, because they're not wealthy enough to own taxable property. This time they do catch a slight break. Anybody who is middle-class and lucky enough to own a home pay the highest percentage of their total wealth as property-wealth taxes, because virtually all their wealth is tied up in that property. The wealthy pay almost no property-wealth taxes relative to their total wealth because only a tiny amount of their wealth is tied up in property.
If you graph it out, at the bottom the effective wealth tax is zero, then it jumps to a much higher number, then it declines more and more as you get richer and richer.
I say screw property taxes and replace them with a proper progressive wealth tax. Along with that, an inheritance tax with teeth and proper enforcement. The grandkids of billionaires should be starting on an equal footing with everyone else.
A ruling against wealth taxes would be insane and would essentially overturn our entire history of tax law. But it would be especially nuts in light of the ruling in NFIB v Sebelius that the government can hit you with a tax for doing nothing. That seems utterly incompatible with the idea that the government doesn't have the power to tax owning things and/or amassing wealth.
I guess that would mean you can tax not buying something, but you can't tax not selling something.
You say that as if it's a bad thing.
I'm talking about this in terms of jurisprudence. Judges are supposed to rule based on law and precedent, not just on their personal preferences and political views. It's an essential element of the rule of law. There's very little point in having a constitution or laws if judges just ignore them and do whatever they want. I mean, I think most people here would agree that they do not approve of this Court defying precedent and most reasonable interpretations of the law in order to impose their will on the country.
Obviously, the Court can, has, and sometimes should overturn precedent, and potentially throw out decades or centuries of previously settled law. But generally speaking, that ruling should make a very compelling case for such an action. They would essentially be saying that everyone writing and interpreting the laws for all that time had gotten it wrong (intentionally or otherwise), including potentially the people who wrote the very sections of the constitution that the ruling is based on.
The more specific point I was making was that Roberts had ruled that the government could use the tax power alone to tax "not having insurance" and that it wouldn't run afoul of the constitution as long as it wasn't just a head tax applied to everyone indiscriminately, as that would be a direct tax which must be apportioned among the states.* That's the same clause that is being invoked in this case as a reason why wealth taxes shouldn't be allowed.
A ruling against taxes on unrealized gains would not only require the Court to assert that we've been doing it wrong this whole time and that we only just now figured that out, but Roberts in particular would be doing a complete 180 on the issue. Jumping from one extreme end of the spectrum to the other would be a rather remarkable change, one that would be hard to reconcile without concluding that one decision or the other was dishonest and politically motivated.
* And because it had a regulatory intent, aimed at compelling people to buy insurance, it had to also not be so crippling a burden that it's effects would need to go through police or regulatory powers.