There is real danger lurking in President Biden’s recently released 2023 federal budget. Forget the lunacy of hiking taxes by 33% on our largest employers - that’s dumb, but it isn’t sinister. His “Billionaire’s Minimum Tax” however, is truly menacing.  Because the proposal, for the first time in the history of our country, would qualify unrealized gains as “income” and taxed accordingly, it is in effect a wealth tax.  But there is a reason why these gains have historically been referred to as “phantom income” – the gains can easily dissolve in a real estate recession or a major drop in the value of equities.  

 

Now we could just stop there, and it’s not hard to imagine the various problems (constitutionality, claw backs, valuation challenges etc.) – but let’s not stop there, because the progressives won’t stop there.  
 

Let’s think about where this foolishness could end up if we aren’t careful. Consider that when the permanent income tax rolled out in 1913, the rate schedule ran 1 – 7%.  Within six years it ran 4 – 73%.  I’m not arguing with the need for the basic income tax, we’ve learned to live with that. But I am concerned that once progressives get their nose under the (new idea) tent with a modest win, they won’t stop with modest spoils. 
 

Is it conceivable that our young entrepreneurs and future generations could someday have their net worth effectively capped?  You answer for yourself, but my gut tells me yes they certainly could. 
 

 $100 million?…$50 million?…$25 million?…
 

Do I think Jeff Bezos has too much money? Sure I do. But I’m not willing to see my kids and their ambitious friends have their upside robbed from them someday because Jeff Bezos is an easy target in 2022.  

 

The good news is it simply won’t pass this year or likely in the immediate future. But Mike Levin and Elizabeth Warren are playing the long game.  Get it out there and have a debate about the idiotic notion of taxing somebody on money they don’t have yet -  and in a few years, seasoned with some legitimacy inspiring PR from the mainstream press, it will have a new floor debate and feel a lot more acceptable as a general notion.  

 

The idea of a wealth tax, quasi or otherwise, is simply unAmerican.