Presidential candidate Bernie Sanders proposed an annual wealth tax topping out at 8% for the richest Americans, offering the farthest-reaching Democratic plan to pay for expanded government programs and break up concentrated fortunes.
Under the current tax code, increases in wealth aren't taxed as income unless people sell assets and realize gains, which are often taxed at preferential rates.
Implementing a wealth tax would be challenging, with cascading effects on tax revenue, business ownership and philanthropy.
Such a change would require new rules and procedures for determining wealth each year and additional Internal Revenue Service resources to prevent tax avoidance and tax evasion.
To improve enforcement, Mr. Sanders calls for imposing an exit tax of up to 60% on the assets of wealthy people who renounce their U.S. citizenship.
Analysts have questioned whether wealth taxes would actually raise as much money as the campaigns estimate, both because of tax avoidance and because of disagreements over how much wealth is concentrated at the top of the distribution.
"These wealth taxes raise a lot of money, perhaps not as much as the advocates hope," said Janet Holtzblatt, a senior fellow at the Tax Policy Center, a Washington group run by a former Obama administration official.
https://www.wsj.com/articles/bernie-sanders-calls-for-8-wealth-tax-on-richest-americans-11569334693
Under the current tax code, increases in wealth aren't taxed as income unless people sell assets and realize gains, which are often taxed at preferential rates.
Implementing a wealth tax would be challenging, with cascading effects on tax revenue, business ownership and philanthropy.
Such a change would require new rules and procedures for determining wealth each year and additional Internal Revenue Service resources to prevent tax avoidance and tax evasion.
To improve enforcement, Mr. Sanders calls for imposing an exit tax of up to 60% on the assets of wealthy people who renounce their U.S. citizenship.
Analysts have questioned whether wealth taxes would actually raise as much money as the campaigns estimate, both because of tax avoidance and because of disagreements over how much wealth is concentrated at the top of the distribution.
"These wealth taxes raise a lot of money, perhaps not as much as the advocates hope," said Janet Holtzblatt, a senior fellow at the Tax Policy Center, a Washington group run by a former Obama administration official.
https://www.wsj.com/articles/bernie-sanders-calls-for-8-wealth-tax-on-richest-americans-11569334693
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