quote:

Originally posted by jon-nyc:

quote:

Originally posted by QuirtEvans:
I said, "Do you have any source material to which you can point, so I can understand whether people who are claiming there is a constitutional issue are differentiating property taxes somehow?"

I thought the reference to Article 1 would have put that concern to rest. It’s a limitation on the Federal government, the property taxes you pay are local.

And given that, the continued requests for links don’t really seem to be in good faith. You are more than capable of searching for arguments pro and con.

Your refusal to say where you've read the arguments doesn't really seem to be in good faith to me.

Three times now.

If you were capable of finding references to the Constitution, one presumes you were capable of finding the arguments you read, too. Could it be that they were not quite as definitive as you want to make them out to be?

One wonders.

quote:

Originally posted by piqué:
Amanda, do you mean inheritance taxes? Have you thought of taking out a life insurance policy that would cover the inheritance taxes? Or if the farmland qualifies, you can also sell a conservation easement on the property, which could then cover the taxes.

No, no - nothing to do with inheritance taxes (which even under Dems starts with ~ $5MM exemption. Which, if I need say, is waayyy above my threshhold).

As for life insurance to protect against such taxes, even if one were living in an era where their relatively modest estates were at serious risk of being depleted, I am WAY over the age where one could reasonably take out such a policy! What do you think my premiums would be assessed at? But again, this doesn't begin to apply to my "estate" even at the original "Hilary/Obama" threshhold - which FWIW was also set to increase with inflation.

Perhaps you aren't aware of the whole issue of resetting the "basis"of property inherited at death. According to this allowance, the federal capital gains tax ordinarily assessed when property is sold, is cancelled when the property changes hands upon a death.

To be specific, our land was a gift and thus its basis is zero (ouch, just considering it) so that whenever it's sold the entire value must be taxed as profit.

OTOH, if say, a child inherits said land, that taxable profit is erased and the heir can sell it without being required to pay capital gains - at least 15% and up to 25% when last I checked, as a function of several factors.

It's not Trump-worthy acreage but acquiring it as an inheritance, would make a six figure difference benefiting that son (it was originally given to him and his brother, but explaining its peregrinations of ownership risks taking the narrative too far afield).

Thanks for the suggestions!

Quirt - I confess I’ve seen no commentary that differentiates a Federal wealth tax proposal from existing property taxes. Most commenters probably assume their readers would know that the relevant sections of the constitution constrain the federal government and not local governments.

But if I see it addressed somewhere I’ll let you know. Maybe Vox will ‘splain it.

quote:

Originally posted by jon-nyc:
Quirt - I confess I’ve seen no commentary that differentiates a Federal wealth tax proposal from existing property taxes. Most commenters probably assume their readers would know that the relevant sections of the constitution constrain the federal government and not local governments.

But if I see it addressed somewhere I’ll let you know. Maybe Vox will ‘splain it.

Or maybe Warren has a way around it. I confess that I've read nothing more than what's in this thread, and I am not a tax expert. I prefer to rely on people who actually do this for a living.

There are certainly knowledgeable folks to be found on each side of this.


As you know nothing is definitively unconstitutional until the current court says so.

I know nothing about Warren's proposal beyond what's been discussed here. This showed up in my news feed and I thought I'd throw it out there for others who are following it more closely.

https://www.latimes.com/busine...-20190125-story.html

I think it's worth making a distinction between earned income (e.g., wages) and other income (interest, investments, yada yada). If we're talking about folks who make north of, say, $20M per year in wages, we're really talking only about celebrities and athletes and the occasional CEO. Those aren't the people that Warren wants to get. She wants the fat cat business people and their beneficiaries/families/trust fund people. It definitely has some political power.

It's also very unlikely to ever pass. My 2c.

quote:

Originally posted by well-tempered gardener:
I know nothing about Warren's proposal beyond what's been discussed here. This showed up in my news feed and I thought I'd throw it out there for others who are following it more closely.

https://www.latimes.com/busine...-20190125-story.html

I didn't see the LAT piece but ran across the journal article yesterday, its the article that people point to when they want to say this is constitutional. I doubt the federalist society would support the logic of the piece, and that's who's feeding us supreme court justices these days.


But as Nina says, I don't think we'll ever find out.

One other problem worth mentioning, which has a lot to do with why so many countries have abandoned wealth taxes. THey're really hard to administer.

Stock in public companies is fine. But what about really illiquid stuff that some of these very wealthy people own? What is Trump International worth? Bechtel? Palentir?

For any particular sum you might want to raise by taxing capital, it still seems more efficient to do it through the capital gains rate. Just by eliminating the step-up basis, which seems like an obvious loophole to close, we would probably get $100B a year.

You could buy a lot of undeclared war health care for that.

quote:

Originally posted by jon-nyc:

quote:

Originally posted by well-tempered gardener:
I know nothing about Warren's proposal beyond what's been discussed here. This showed up in my news feed and I thought I'd throw it out there for others who are following it more closely.

https://www.latimes.com/busine...-20190125-story.html

I didn't see the LAT piece but ran across the journal article yesterday, its the article that people point to when they want to say this is constitutional. I doubt the federalist society would support the logic of the piece, and that's who's feeding us supreme court justices these days.


But as Nina says, I don't think we'll ever find out.

Out of curiosity, how do you imagine the Federalist Society distinguishes estate and gift taxes?

Wait, what? Are people really suggesting that a wealth tax would be unconstitutional?

Well, I am far from a constitutional law specialist, but I think that argument is bananas. From the article:

quote:

The notion that a wealth tax is unconstitutional derives from a provision of the Constitution prohibiting “direct” taxation unless it’s “apportioned among the states.” That’s generally taken to mean that the amount raised from each state must be proportionate to its population.

That means a direct tax can raise the same amount from Connecticut as from Mississippi because they have roughly the same population (3 million), even though the first is the richest state in the union (with per capita income of more than $36,000) and the second is the poorest ($20,000).

No, no, no. "Apportioned among the states" ought to mean that the federal government cannot pass a tax that only applies to people in one state versus another. Trump cannot raise taxes on NY and CA while not also raising taxes on people in WV.

So long as a wealth tax applied to people in California and people in Mississippi, it is apportioned among the states.

So says Justice Sphinx.

On the merits:

I just don't see a wealth tax working. What you would have is a giant sucking sound as wealthy people move assets off-shore or transfer assets to shell corporations or trusts or whatever.

I think you also see a ripple effect throughout the economy in the real estate market. If I am a fat cat and I own a shopping mall or office building, it instantly becomes less valuable if I am going to have to pay additional tax on it for every year I own it.

And as a practical matter . . . Dems need to calm down. Most people in this country are not moved by "soak the rich" schemes that are this bold. They mostly want jobs and they want wages to rise. They want health care. For every Dem you energize with this, there is an independent who wonders if proponents are socialists, communists, or worse.

If you rock the boat too much, Dems, it can sink on you.

quote:

Originally posted by QuirtEvans:

quote:

Originally posted by jon-nyc:

quote:

Originally posted by well-tempered gardener:
I know nothing about Warren's proposal beyond what's been discussed here. This showed up in my news feed and I thought I'd throw it out there for others who are following it more closely.

https://www.latimes.com/busine...-20190125-story.html

I didn't see the LAT piece but ran across the journal article yesterday, its the article that people point to when they want to say this is constitutional. I doubt the federalist society would support the logic of the piece, and that's who's feeding us supreme court justices these days.


But as Nina says, I don't think we'll ever find out.

Out of curiosity, how do you imagine the Federalist Society distinguishes estate and gift taxes?

I think they would say the fact that the tax is initiated by a transfer makes it indirect.

Indeed that’s what SCOTUS said:

quote:

Inheritance and estate taxes were upheld in the Knowlton case of 1900 not as direct taxes on wealth, but as indirect taxes on the transfer of wealth. Corporate income taxes were upheld in the Flint case of 1911 not as taxes on the value of shares or income, but as excise taxes on the privilege of doing business in the corporate form. However, those taxes in some way involve a transaction, while the Warren wealth tax does not

https://taxfoundation.org/warr...x-constitutionality/

By the way, I believe it’s the case that the Federalist Society types think Pollack was wrongly decided and that the income tax was indirect. Some of them do anyway. IOW the income taxes should have been legal even w/o the 16th amendment.