Wealth Tax

 

Elizabeth Warren is proposing a “Wealth Tax.”  It would be more descriptive to call it a “Property Confiscation Tax,” because your property, what you own, is your wealth.  That is a new ball game…a totally different concept than taking a portion of your income to finance your government.  Once the citizens agree with the concept of the government taking your property, which you acquired with after tax dollars, the only question will be how much property will the government determine you need to keep?  There is also a hidden tax due.  Consider someone subject to a $10,000. wealth tax bill.  They probably do not have that in cash, but have investments which they will have to convert to cash to pay the tax.  For example, they may have Microsoft stock they bought and held which is now worth 10 times what they paid for it.  After the Biden administration changes the capital gains laws to the rate of ordinary income, figuring federal and state taxes, you will have to pay somewhere in the neighborhood of 40% tax on the gain.  To illustrate, if you sell $1000. of Microsoft stock, your basis is $100, so you pay a gain on $900, or $360 in tax, leaving you with $540 after tax on the gain and your $100 basis, or $640.  So, you keep 64% of what you sell, with which you can pay your wealth tax.  So, you must sell $15,625. ($10,000 divided by .64) of stock, and pay it all in taxes, $5,625 in capital gains taxes and $10,000. In wealth taxes.  You have reduced your “wealth” by $15,625.  Sneaky government gets money from you coming and going.  And remember, you bought your original Microsoft stock with after tax dollars.  Just know that the confiscation tax threshold will not stay at 50 million dollars.  With the government handing out money in chucks of $1,900,000,000,000. to buy your votes, the confiscation tax threshold will continue to drop, and the government doesn’t care if you are a Democrat or Republican…they just want your money so they and not you can decide how to spend it.