Democratic leaders are suggesting a new way to fund President Biden’s multitrillion-dollar global warming and social policy spending bill — a tax on your unrealized capital gains.
Unrealized capital gains are upticks in the value of stock ownership that the buyer has yet to “realize” by selling their stock at the new price.
“We will probably have a wealth tax,” DNC House Speaker Nancy Pelosi said to CNN this week.
In another interview, Treasury Sec. Janet Yellen admitted that the new policy was being worked on, though she did not call it a wealth tax. According to her, the policy would create a tax on billionaires’ stock gains and other assets such as real estate.
“I would not call it a wealth tax, but it would help to get capital gains, which are a very big part of the yearly incomes of the wealthiest people and escape taxation until they are realized,” Yellen said.
.@SecYellen on the proposed tax which would pay for the Build Back Better act: "It's not a wealth tax, but a tax on unrealized capital gains of exceptionally wealthy individuals." pic.twitter.com/7JXAysPkxI
— The Hill (@thehill) October 24, 2021
According to the NY Times, the policy is now being put together by Dem Senator Ron Wyden (Ore.), who leads the Senate Finance Committee. It is expected to be announced sometime this week.
“It would affect Americans with $1 billion in assets or people who have had at least $100 million in yearly income for three years in a row,” the Times said, adding that “Dems hope it would create at least $200 billion in funds over ten years.”
Yet even $200 billion is just a drop in the bucket when it comes to the overall price of Joe Biden’s proposal, which now is around $2 trillion.
The proposal kicked off at $3.5 trillion but has needed significant downsizing in recent weeks because of opposition to the proposal from Democrats — including Senators Joe Manchin (from W.Va.) and Kyrsten Sinema (from Ariz.).
The bill’s stagnation in Washington has left supporters scrambling to find good ways to fund for it. But it remains to be seen if a tax against unrealized capital gains will be accepted by moderate Dems.
The tax is certainly hated among Republicans. During his interview with Mark Levin, Senator Tim Scott (R-S.C.) said the idea was very problematic.
“Part of their strategy is not only to boost the tax rates but to find new ways to get revenue from money that is not even in your account yet,” Scott stated. “That is something not only problematic. It is something that discourages our economic system itself.”
Author: Scott Dowdy