{"id":357984,"date":"2021-10-26T04:47:00","date_gmt":"2021-10-26T01:47:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/so-what-exactly-is-a-billionaires-tax-and-how-would-it-work\/"},"modified":"2021-10-26T04:47:00","modified_gmt":"2021-10-26T01:47:00","slug":"so-what-exactly-is-a-billionaires-tax-and-how-would-it-work","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/so-what-exactly-is-a-billionaires-tax-and-how-would-it-work\/","title":{"rendered":"#: So what exactly is a billionaires\u2019 tax \u2014 and how would it work?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6af69fbe54649\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6af69fbe54649\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/so-what-exactly-is-a-billionaires-tax-and-how-would-it-work\/#And_would_it_be_hard_to_implement_Experts_weigh_in\" >And would it be hard to implement? Experts weigh in<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/so-what-exactly-is-a-billionaires-tax-and-how-would-it-work\/#This_isnt_a_wealth_tax_Yellen_says\" >This isn\u2019t a wealth tax, Yellen says<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/so-what-exactly-is-a-billionaires-tax-and-how-would-it-work\/#%E2%80%98Mark-to-market_approach\" >\u2018Mark-to-market approach\u2019<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/so-what-exactly-is-a-billionaires-tax-and-how-would-it-work\/#What_assets_are_subject_to_this_treatment\" >What assets are subject to this treatment?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/so-what-exactly-is-a-billionaires-tax-and-how-would-it-work\/#Is_this_doable\" >Is this doable?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/so-what-exactly-is-a-billionaires-tax-and-how-would-it-work\/#Andrew_Keshner\" >Andrew Keshner<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#: So what exactly is a billionaires\u2019 tax \u2014 and how would it work?<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"And_would_it_be_hard_to_implement_Experts_weigh_in\"><\/span>\n  And would it be hard to implement? Experts weigh in<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\" role=\"region\" aria-label=\"article body\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000458896\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000458896\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       The prospect of a new \u201cbillionaires tax\u201d is dawning while the chances dim for income tax and capital gains rate hikes on the rich. Democrats, meanwhile, continue to work out how to pay for a bill aimed at the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a> safety net.<\/p>\n<p> The tax would <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ly to households worth at least $1 billion, or with three straight years of income over $100 million, according to the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/billionaires-tax-bill-us-democrats-what-to-know-11635183720?mod=article_inline\" class=\"icon none\">Wall Street Journal. <\/a><\/p>\n<div class=\"paywall\">\n       Although Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, has been working on the topic for years, it remains to be seen what specifically will be proposed for a spending bill that can\u2019t afford any Democratic defectors.<\/p>\n<p>Here\u2019s what we know now:<\/p>\n<h4><span class=\"ez-toc-section\" id=\"This_isnt_a_wealth_tax_Yellen_says\"><\/span>This isn\u2019t a wealth tax, Yellen says<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The way it currently works, an event like an asset\u2019s sale \u2014 or, in tax-speak, a \u201crealization\u201d \u2014 is the time when the Internal Revenue Service swoops in to assess a capital gains tax on a rich person\u2019s portfolio.<\/p>\n<p>That means large sums of wealth, like publicly-traded securities or privately-held businesses, might be gaining value and going untaxed because the owners can afford to sit on them and let the money grow.<\/p>\n<p>Treasury Secretary Janet Yellen said<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnn.com\/videos\/politics\/2021\/10\/24\/yellen-on-billionaire-tax.cnn\" class=\"icon none\"> Sunday on CNN<\/a> the proposal \u201cwould impose a tax on unrealized capital gains on liquid assets held by extremely wealthy individuals, billionaires.\u201d<\/p>\n<p>\u201cI wouldn\u2019t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals,\u201d she added.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"%E2%80%98Mark-to-market_approach\"><\/span>\u2018Mark-to-market approach\u2019<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The proposal would calculate the paper gains in wealth \u2014 at a set point in time like the end of the year \u2014 through a so-called \u201cmark-to-market\u201d approach, explained Howard Gleckman, senior fellow at the Tax Policy Center. \u201cYou\u2019re marking the value of the asset to the market,\u201d he said.<\/p>\n<p>Suppose a hypothetical stock has a $100 market value on Jan. 1 and ends at $130 on Dec. 31. The tax is based on the $30 rise, Gleckman said.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>The top federal capital gains rate is now 20%. The Net Investment Income Tax adds another 3.8% for <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.irs.gov\/newsroom\/questions-and-answers-on-the-net-investment-income-tax\" class=\"icon none\">high-earners<\/a> . <\/p>\n<p>Corporate equities generate 40% of the wealth that flows to the top 0.01% of America\u2019s households, according to recent research. But in the so-called \u201cbuy, borrow, die\u201d strategy, the super-rich can get loans against the paper gains in their portfolios and then pass on the appreciated assets.<\/p>\n<p>The existing \u201cstep-up-in-basis\u201d provisions help inheritors by resetting the \u201ccost basis\u201d to when they receive the asset, and that can greatly shrink the tax bill if there\u2019s ever a future sale.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"What_assets_are_subject_to_this_treatment\"><\/span>What assets are subject to this treatment?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>All kinds of assets growing in value can be subject to capital gains tax if there\u2019s a sale. But how can the taxman determine what the value at a set point in time may be if there\u2019s no sale to take into consideration?<\/p>\n<p>With publicly-traded stocks, \u201cdoing that calculation is very simple,\u201d Gleckman said. \u201cWhere this really matter is a privately held business \u2026 The valuation problem is the big problem,\u201d he later added.<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetPullQuote\n            inline\n    scope-web|mobileapps\n  article__inset\n          article__inset--type-InsetPullQuote\n            article__inset--inline\n  \"><\/p>\n<div class=\"wsj-article-pullquote article__inset__pullquote \">\n<p class=\"pullquote-content article__inset__pullquote__quote\">\n        <span class=\"l-qt article__inset__pullquote__mark--left\">\u201c<\/span>Applicable taxpayers would be required to annually pay income taxes on unrealized gains and would be able to take a deduction for unrealized losses from tradable property<span class=\"r-qt article__inset__pullquote__mark--right\">\u201d<\/span><\/p>\n<p>        <small><br \/>\n          <span class=\"inset-author article__inset__pullquote__author\">\u2014 Democratic Sen. Ron Wyden\u2019s 2019 proposals<\/span><br \/>\n        <\/small><\/p><\/div>\n<\/p><\/div>\n<p>       Unless there are any changes, there\u2019s a good chance the mark-to-market accounting at issue will only apply to publicly traded securities, said David Gamage, an Indiana University Maurer School of Law professor who specializes in tax policy and has previously met with Wyden\u2019s office.<\/p>\n<p> \u201cWe know what they are thinking and <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly planning, but we don\u2019t know the specific language,\u201d he said.<\/p>\n<p>To be clear, Wyden \u2014 whose office could not be immediately reached for comment \u2014 has been talking for a long time about levying yearly taxes on unrealized gains.<\/p>\n<p>The question of which assets are subject to this annual taxation is a major one \u2014 in addition to how the rule will treat capital losses in a given year, according to Garrett Watson, senior policy analyst at the Tax Foundation. Some clues on what may lie ahead are contained in <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.finance.senate.gov\/imo\/media\/doc\/Treat%20Wealth%20Like%20Wages%20RM%20Wyden.pdf\" class=\"icon none\">Wyden\u2019s 2019 proposals<\/a> on unrealized gains, Watson said.<\/p>\n<p>\u201cApplicable taxpayers would be required to annually pay income taxes on unrealized gains and would be able to take a deduction for unrealized losses from tradable property,\u201d according to the proposal. It also said at the time a \u201clookback charge\u201d would apply when non-tradable assets get sold.  <\/p>\n<h4><span class=\"ez-toc-section\" id=\"Is_this_doable\"><\/span>Is this doable?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Pretty much every country in the developed world taxes capital gains \u2014 following the time of sale, said Watson, noting there\u2019s a narrow exception in the Netherlands. <\/p>\n<p>\u201cIt\u2019s an untested idea,\u201d Watson said. \u201cThere\u2019s a lot of risk in terms of design and concept,\u201d he said. <\/p>\n<p>In America, broker-dealer companies already have to do this kind of accounting when they evaluate the value of their inventory when they pay their taxes, Gleckman said. But \u201cfor individuals, it\u2019s a very new regime and it\u2019s going to raise a lot of questions,\u201d he added. <\/p>\n<p>\u201cIt\u2019s not impossible to do, but it\u2019s hard to do this,\u201d he said.<\/p>\n<p>In the current tax-hike debate, the uproar over a reporting proposal that would make banks report cash flow information above a certain amount (first $600 and now $10,000), shows the feasibility of tax ideas can get people fired up. <\/p>\n<p>One line of argument for critics of the reporting proposal is that it would unnecessarily rope in regular taxpayers and put an administrative burden on financial firms.<\/p>\n<p>But the mark-to-market approach is an easy lift under the circumstances, Gamage said.<\/p>\n<p>If lawmakers wanted this approach for a larger set of taxpayers, that would be a \u201cgiant administrative burden for the IRS,\u201d he said. But if the rules just apply to the small sliver of billionaires, that\u2019s \u201cvery minor in the scheme of things.\u201d<\/p>\n<p>Gamage, an Obama-era special counsel to the Treasury Department\u2019s Office of Tax Policy from 2010 to 2012, is awaiting specifics. But in his view, \u201cthey are picking the easiest version of this reform.\u201d<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Andrew Keshner\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/author\/andrew-keshner\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/andrewkeshner\",\"text\":\"@andrewkeshner\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"mailto:akeshner@marketwatch.com\",\"text\":\"akeshner@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\" aria-label=\"links to  author page\"><span class=\"ez-toc-section\" id=\"Andrew_Keshner\"><\/span>Andrew Keshner<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7700-90D8F913DDF2%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#: So what exactly is a billionaires\u2019 tax \u2014 and how would it work?&#8221; And would it be hard to implement? Experts weigh in The prospect of a new \u201cbillionaires tax\u201d is dawning while the chances dim for income tax and capital gains rate hikes on the rich. Democrats, meanwhile, continue to work out how&#8230;<\/p>\n","protected":false},"author":1,"featured_media":357985,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-423145\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-357984","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/357984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=357984"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/357984\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/357985"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=357984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=357984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=357984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}