Massachusetts Senator Elizabeth Warren wants to pass a “wealth tax” of 2% on assets held by rich people over $50 million and 3% on assets over $1 billion as the next President of the United States of America.
Some say wealthy people support such a tax. “Over the years, we have seen that this population is willing to pay more,” said George Walper, president of Spectrem Group which did the poll survey with CNBC.
Some uber-rich people such as Warren Buffett have said for years that he wants to pay more in taxes.
Take it from someone who dealt directly with very smart tax lobbyists on Capitol Hill for years: “Rich people do not want to pay more in taxes, period!”
If they did, they would not hire such expensive tax lobbyists. Nor would they hire very expensive tax lawyers and accountants by the boatload each year to find ways to minimize their taxes, not increase them.
Rich people can pay more taxes today if they so choose. All they have to do is fire every expensive tax lawyer, accountant and lobbyist they have retained to find ways to shelter income and not expose all of it to the full taxable rates set by Congress.
If they get a refund, they can deposit it in the Gifts to Reduce the Public Debt account at the Bureau of the Fiscal Service of the US Treasury.
$4,686,987.27 has been paid into this account in 2019. Our federal deficit is expected to be $896 billion this year. Adding more than 191,000 times more debt over debt reduction payments is not a long-term solution to our debt bomb crisis.
Even smart well-meaning multi-millionaires should understand the futility of doing so.
The Spectrem survey was done with 750 high net worth individuals split across political lines. There are 14 million people in America with investible assets of over $1 million. If all of the 750 respondents held assets below $50 million, of course they would support a higher tax on the uber-wealthy above them.
One thing the survey did find was that 72% of the respondents did not support eliminating tax deductions. Of course not; rich people can afford to find complicated tax schemes with multiple deductions to prevent their income from being taxed in the first place.
One very wealthy person told me: “No one I know who is rich is stupid enough to pay themselves more than $10 million in salary to begin with. I haven’t taken any salary in the last 20 years. Then I would have to pay income taxes and Medicare Part A payroll tax on all of that $10 million. Any income I make comes out of capital gains which is taxed at a lower rate with no payroll tax.”
Capital gains of asset values are taxed at 15% up to $488,850 and at 20% above that. That is far below the top marginal income tax rate of 37% today.
Very wealthy people don’t pay the high marginal tax rates based on the published tax tables from the IRS. They target an effective tax rate they choose to pay to the government, usually far below 20% of their income and tell their accountants and lawyers to find ways to do it.
Warren’s proposal is scored to increase revenues by $275 billion/year. It might reduce annual deficits to around $500 billion if spending was held constant at current baseline levels.
However, Warren and all of her very left-leaning socialist Democratic presidential candidates want to add on trillions of dollars of more spending for free Medicare for all, education for all and a guaranteed income for all.
$275 billion raised in new taxes, from any source, under their policies would be like spitting in the wind.
Wealthy people saying they want Elizabeth Warren to raise their taxes are being politically hypocritical.
Just pay more taxes right now if you want to. There is nothing stopping you.