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1038

Billionaires are hoarding trillions in untaxed wealth. They want the Supreme Court to keep it that way (www.rollingstone.com)

submitted 11 months ago by MicroWave@lemmy.world to c/news@lemmy.world

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A new report from Americans for Tax Fairness found that America’s richest families accumulated $8.5 trillion in untaxed capital gains in 2022

America’s wealthiest families held an astounding $8.5 trillion in untaxed profits in 2022. According to a report from the nonprofit Americans for Tax Fairness, which analyzed Federal Reserve data, “one in every six dollars (18 percent of the nation’s unrealized gains is held by these roughly 64,000 ultra-wealthy households, who make up less than 0.05 percent of the population.” The report comes as the Supreme Court gears up to decide a case that could preemptively block any efforts to tax the wealth of billionaires.

The data looks at “quiet” income generated by “centi-millionaires,” Americans holding at least $100 million in wealth, and billionaires through unrealized capital gains. Those gains accumulate, untaxed, as assets and investments like stocks, real estate, bonds, and other investments increase in value. If those assets are not sold — or “realized” — they are not taxed, yet America’s wealthiest families can leverage that on-paper value increase to secure favorable loans with low-interest rates in lieu of using taxable income to finance their lifestyle.

“Of the $139 trillion in America’s national wealth, almost three-quarters (73 percent) is held by the richest 10 percent of households, over one-third (35 percent) by the richest 1 percent, and an astounding 11 percent — $15.2 trillion — is held by the handful of fortunate households that make up the billionaire and centi-millionaire class,” the report says. “The wealthiest 1 percent of households hold 44 percent of national unrealized gains ($21.2 trillion), with billionaires and centi-millionaires alone controlling 18 percent ($8.5 trillion).”

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[–] HerbalGamer@sh.itjust.works 2 points 11 months ago (1 children)

would essentially overturn our entire history of tax law.

You say that as if it's a bad thing.

[–] Makeitstop@lemmy.world 1 points 11 months ago

I'm talking about this in terms of jurisprudence. Judges are supposed to rule based on law and precedent, not just on their personal preferences and political views. It's an essential element of the rule of law. There's very little point in having a constitution or laws if judges just ignore them and do whatever they want. I mean, I think most people here would agree that they do not approve of this Court defying precedent and most reasonable interpretations of the law in order to impose their will on the country.

Obviously, the Court can, has, and sometimes should overturn precedent, and potentially throw out decades or centuries of previously settled law. But generally speaking, that ruling should make a very compelling case for such an action. They would essentially be saying that everyone writing and interpreting the laws for all that time had gotten it wrong (intentionally or otherwise), including potentially the people who wrote the very sections of the constitution that the ruling is based on.

The more specific point I was making was that Roberts had ruled that the government could use the tax power alone to tax "not having insurance" and that it wouldn't run afoul of the constitution as long as it wasn't just a head tax applied to everyone indiscriminately, as that would be a direct tax which must be apportioned among the states.* That's the same clause that is being invoked in this case as a reason why wealth taxes shouldn't be allowed.

A ruling against taxes on unrealized gains would not only require the Court to assert that we've been doing it wrong this whole time and that we only just now figured that out, but Roberts in particular would be doing a complete 180 on the issue. Jumping from one extreme end of the spectrum to the other would be a rather remarkable change, one that would be hard to reconcile without concluding that one decision or the other was dishonest and politically motivated.

* And because it had a regulatory intent, aimed at compelling people to buy insurance, it had to also not be so crippling a burden that it's effects would need to go through police or regulatory powers.