[While most Americans predominantly live off the income they earn
from a job—income that is taxed all year, every year—the very
richest households live lavishly off capital gains that may never be
taxed.]
[[link removed]]

$8.5 TRILLION IN UNTAXED ASSETS: DATA SHOWS WHY ‘WE NEED A
BILLIONAIRE INCOME TAX’  
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Jake Johnson
January 4, 2024
Common Dreams [[link removed]]

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_ While most Americans predominantly live off the income they earn
from a job—income that is taxed all year, every year—the very
richest households live lavishly off capital gains that may never be
taxed. _

Tesla CEO Elon Musk speaks onstage during an event on November 29,
2023 in New York City., Slaven Vlasic/Getty Images for The New York
Times

 

An analysis
[[link removed]] released
Wednesday shows that in 2022, the wealthiest people in the United
States collectively held a "staggering" $8.5 trillion in wealth that
is not—and might never be—subject to taxation.

Examining recently released data Federal Reserve data
[[link removed]] for 2022,
Americans for Tax Fairness (ATF) found that the roughly 64,000 U.S.
households with at least $100 million in wealth—less than 0.05% of
the population—controlled more than one in every six dollars of the
country's "unrealized gains," profits that aren't taxable until the
underlying asset, such as a stock position, is sold.

"But the ultra-wealthy don't need to sell to benefit: They can live
off low-cost loans secured against their growing fortunes. And once
inherited, such gains disappear completely for tax purposes," ATF's
Zachary Tashman and William Rice explained in the new analysis. "While
most Americans predominantly live off the income they earn from a
job—income that is taxed all year, every year—the very richest
households live lavishly off capital gains that may never be taxed."

That small, ultra-rich fraction of U.S. society is sitting on more
unrealized capital gains than the bottom 84% of the country—roughly
110 million households—combined, Tashman and Rice noted.

Most of the typical U.S. household's unrealized capital gains are in
the form of their homes, which face state and local property taxes.
But 93% of the unrealized gains of America's wealthiest are tied up in
businesses, stock portfolios, and mutual funds, ATF found. As a
result, mega-rich individuals such as Tesla CEO Elon Musk—the
wealthiest man on the planet—wind up paying little to nothing in
federal income taxes
[[link removed]].

Between 2013 and 2018, leading U.S. billionaires paid an average
federal tax rate of just 4.8%, according to a previous ATF analysis
[[link removed]].

"This is why we need a billionaire income tax," the group wrote on
social media Wednesday, pointing to legislative
proposals reintroduced
[[link removed]] late last
year in both chambers of Congress.

BREAKING: Billionaires and centimillionaires held $8.5 TRILLION in
untaxed, unrealized capital gains in 2022.

Unrealized gains are the largest source of income for the
ultra-rich—but they're completely UNTAXED under our tax code.

This is why we need a billionaire income tax 🧵
pic.twitter.com/0ewB3H05SQ [[link removed]]

— Americans For Tax Fairness (@4TaxFairness) January 3, 2024
[[link removed]]

Sen. Ron Wyden's (D-Ore.) Billionaires Income Tax
[[link removed]] would
tax the tradable assets of individuals with more than $100 million in
annual income or more than $1 billion in assets for three consecutive
years, according to a summary released by the Oregon Democrat's
office.

In the House, Reps. Steve Cohen (D-Tenn.) and Don Beyer
(D-Va.) unveiled a bill
[[link removed].] that
mirrors President Joe Biden's call for a minimum income tax for
billionaires. The legislation would require ultra-wealthy households
to pay a 25% annual tax rate on their income, including unrealized
gains.

Last month, the U.S. Supreme Court heard oral arguments
[[link removed]] in
a case backed by right-wing groups aiming to preemptively outlaw any
tax on unrealized gains. The justices—with the notable exception of
Samuel Alito, who was urged to recuse
[[link removed]] from
the case due to his connection to a lawyer representing the
plaintiffs—appeared unlikely
[[link removed]] to
issue the kind of sweeping ruling demanded by right-wing organizations
such as the U.S. Chamber of Commerce.

"Without this necessary reform to our system of taxation, the growth
of untaxed income at the very top of our economy will continue to
accelerate."

ATF's analysis found that the wealth of America's billionaires and
centimillionaires has exploded in recent years as Republicans have
enacted massive tax cuts for the rich while wealth tax proposals have
languished in Congress.

"The cumulative $8.5 trillion of unrealized capital gains held by
America's billionaires and centi-millionaires in 2022 has jumped by
more than half–or $3.2 trillion–just since the last Fed survey
year of 2019," Tashman and Rice wrote. "That increase continues a
decades-long upward trend among the richest households in the United
States."

To begin reversing the trend and addressing the extreme and dangerous
[[link removed]] stratification
of U.S. society by wealth, Tashman and Rice argued that Congress must
"curb the economic and political power of the richest households by
annually taxing their investment gains–whether realized or
not–just as workers' wages are taxed now, every year, all year
round."

"Without this necessary reform to our system of taxation," they
warned, "the growth of untaxed income at the very top of our economy
will continue to accelerate, to the benefit of a tiny few and the
detriment of everyone else."

_JAKE JOHNSON is a senior editor and staff writer for COMMON DREAMS._

_COMMON DREAMS. Another World is Possible.
Common Dreams is a media outlet that exists to make the world a better
place: To inform. To inspire. And to ignite change for the common
good. Nonprofit. Independent. Reader-supported. Thousands of small
donations fund our newsroom and allow us to continue publishing.
Donate! [[link removed]]_

* tax fairness
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* wealth tax
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* wealth inequality
[[link removed]]
* legislation
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* U.S. Congress
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