Just when I thought Joe Biden/WRBA (Whoever is Running the Biden Administration) couldn’t get any stupider, he/they proved me wrong.
The latest bit of stupidity being pushed by SloJo is a wealth tax, though he is calling it “a tax on unrealized gains”.
What are “unrealized gains”? A simple example: You buy stocks as an investment, purchasing 100 shares of XYZ Corporation stock for $10 per share ($1000 total). You hold onto that stock and over time the price per share increases to $100 per share. You keep that stock which is now worth a total of $10,000 with the intention of letting the value grow rather than selling it. Your unrealized gains are the $9000 of increased stock value. But remember, your actual gains won’t be real until you sell the stock.
Now a 20% tax on unrealized gains is imposed and you are expected to pay 20% of your $9000 stock value increase, or $1800. You haven’t sold any stock. You don’t have any money from the value of that stock because you haven’t sold it. It’s only a gain on paper. Not one penny has gone into your pocket/wallet/bank account. The government has taxed your wealth, not what you’ve earned. However, there’s a problem with that tax.
It’s unconstitutional.
Nowhere in the US Constitution is there anything that allows a wealth tax. Nowhere. Nothing in Article I, Section II or Section IX, or the Sixteenth Amendment gives the government the power to impose such a tax. Of course that won’t stop SloJo, WRBA, or the Pelosi/Schumer cabal from trying to do so anyways. We already know they have little use for the Constitution unless it works in their favor.
While this proposed tax will only be imposed on ‘billionaires’ – those with incomes above $100 million (yeah, right) - it will have a number of negative effects. They will come under the sway of the Law of Unintended Consequences, something the Left tries to ignore but always ends up suffering for doing so. (The problem is the rest of us will be suffering even more, though we will know why and who did this to us. The Left won’t care.)
Wealth taxes have been tried in other countries. They have failed to garner the revenues promised every single time. They drive the wealthy to leave and take their wealth with them every single time. Investments decline and investors invest their money elsewhere every single time. Businesses large and small decline and either relocate or close every single time. Economic activity in the countries where the taxes been imposed decline every single time. All one has to do is look at what happened to the UK in the 1970’s and France in the late 2000’s/early 2010’s when they imposed a wealth tax. (Hint: It didn’t work for either of them.)
So, will SloJo and WRBA push this?
If it’s ruled unconstitutional, will they try to ramrod through a Constitutional Amendment enabling a wealth tax? (I doubt they’d get the states needed to ratify such a horrible and damaging Amendment.)
One has to remember that this really has nothing to do with a revenue shortfall. It has everything to do with excessive spending by an administration that can’t seem to read a spreadsheet, has little understanding about how economies work, and really doesn’t care what happens to the economy as long as they stay in power.
