Another potential gift of the 16th Amendment. Squaw Warren’s tax plan is technically, legally possible.
Democratic presidential candidate Elizabeth Warren has unveiled sweeping tax proposals that would push federal tax rates on some billionaires and multimillionaires above 100%.
That prospect raises questions for taxpayers and the broader economy that experts are starting to ponder: Under which circumstances would taxpayers have to pay those rates? How might that change their behavior? And would investment and economic growth suffer?
Potential tax rates over 100% could result from the combination of tax increases the Massachusetts senator proposes for the very top tier of investors. She wants to return the top income-tax rate to 39.6% from 37%, impose a new 14.8% tax for Social Security, add an annual tax of up to 6% on accumulated wealth and require rich investors to pay capital-gains taxes at the same rates as other income even if they don’t sell their assets.
Consider a billionaire with a $1,000 investment who earns a 6% return, or $60, received as a capital gain, dividend or interest. If all of Ms. Warren’s taxes are implemented, he could owe 58.2% of that, or $35 in federal tax. Plus, his entire investment would incur a 6% wealth tax, i.e., at least $60. The result: taxes as high as $95 on income of $60 for a combined tax rate of 158%.
One of the lies told to sell the Sixteenth was that the highest rate would never come close to 10%. My weak math skills suggest that 158 is greater than 10. This may be TPC’s topic for next week. For now, I think I am actually in favor of this scheme of theft and slavery. But maybe that’s just the accelerationist in me. Tick. Tick. Tick.
UPDATE: When reading the WSJ article about Squaw, note the names of the policy-makers and backers.