If the billionaire tax survives, it may face legal challenges. Here's why

Asia's Tech News Daily

Sen. Ron Wyden, D-Ore., speaks during a Senate Finance Committee nomination hearing for Deputy Treasury Secretary nominee Adewale Adeyemo on Feb. 23, 2021.Greg Nash | Pool | Reuters

As Democrats wrestle over how to pay for their social spending package, a proposal to tax the wealthiest Americans has emerged. However, if the plan survives pushback from other party members, it may still face legal obstacles, experts say.

Senate Finance Committee Chairman Ron Wyden, D-Ore., on Wednesday unveiled a plan for a tax on billionaires — affecting Americans with more than $1 billion of wealth or adjusted gross income exceeding $100 million for three consecutive years — according to the proposal.

Billionaires may owe annual levies on asset growth, such as stocks and bonds, regardless of when they sell, known as “mark-to-market.” And non-tradeable assets like real estate, which are harder to value every year, may see a “deferral recapture” charge upon sale.

More from Personal Finance:
Senate Democrats push for billionaire tax
Congress has a new plan to fix Social Security
The era of surprise medical bills may be ending

However, the proposal may have challenges beyond Democratic votes, with opponents arguing parts of the plan may be unconstitutional.

“Invalidating the billionaire mark-to-market tax would not be shocking,” said University of Chicago Law School professor Daniel Hemel. “There are plausible arguments that the [Supreme Court] Justices could make with a straight face.”

For example, the courts may need to decide if asset growth, known as “unrealized gains,” is income, which is taxable under the 16th Amendment.

Invalidating the billionaires' mark-to-market tax would not be shocking.
Daniel Hemel
University of Chicago Law School professor

But the bigger issue may be the definition of billionaire and net worth calculation, Hemel said, because if it's a “direct tax,” it needs to be apportioned, or split up among states based on population, and isn't possible since some places don't have billionaires.

“I would characterize the landscape here as a lot of uncertainty about whether or not this would pass constitutional muster,” said Tax Foundation senior policy analyst Garrett Watson, pointing to similar ambiguities, along with issues of tax avoidance if enacted.

However, Wyden insists the plan is constitutional because it calls for “annually taxing income from capital gains” — a concept that's already part of the tax code. 

“Given that this approach is already in use in existing parts of the tax code, I can't imagine the Supreme Court wants to give the wealthiest people on earth billions in tax cuts, particularly at a time when so many Americans are losing faith in the Supreme Court,” he said in a statement.

Although Wyden's proposal doesn't require Republican support, it needs votes from every Democratic Senator and nearly every Democrat in the House to advance.

Sen. Joe Manchin, D-W.Va., expressed concerns about the billionaire tax on Wednesday. However, it's unclear whether he may eventually support the plan. And Democrats also need a vote from Sen. Kyrsten Sinema, D-Ariz., who has pushed back on other tax hikes.

Moreover, House Ways and Means Committee Chairman Richard Neal, D-Mass., doesn't support the plan, but may reconsider with 50 votes from Senate Democrats.

Meanwhile, the party is also weighing a surtax on millionaires making more than $10 million, a corporate minimum tax and increased bank reporting.

CNBC's Ylan Mui contributed to this story.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

New home permits soar 24.4% in Jan.-Oct.

A view shows apartment complexes in Seoul on Nov. 21. (Yonhap)New home permits in South Korea surged more than 24 percent in the first 10 months of the year amid ... Read more »

Advanced Micro Devices (AMD) Gains But Lags Market: What You Should Know

Advanced Micro Devices (AMD) closed at $150.68 in the latest trading session, marking a +1.05% move from the prior day. This move lagged the S&P 500’s daily gain of 1.42%. ... Read more »

Tesla (TSLA) Stock Sinks As Market Gains: What You Should Know

Tesla (TSLA) closed the most recent trading day at $1,084.60, moving -0.95% from the previous trading session. This move lagged the S&P 500’s daily gain of 1.42%. Elsewhere, the Dow ... Read more »

Will Omicron Stop the Market In Its Tracks?

Investors are understandably rattled by the new strain of the coronavirus that has landed on U.S. soil, especially considering the fact that this mutation is way more contagious than Delta, ... Read more »

Hologic (HOLX) Gains But Lags Market: What You Should Know

Hologic (HOLX) closed at $73.77 in the latest trading session, marking a +0.97% move from the prior day. This move lagged the S&P 500’s daily gain of 1.42%. Elsewhere, the ... Read more »

Meta Platforms (FB) Stock Sinks As Market Gains: What You Should Know

In the latest trading session, Meta Platforms (FB) closed at $310.39, marking a -0.07% move from the previous day. This change lagged the S&P 500’s daily gain of 1.42%. Elsewhere, ... Read more »

Abbott (ABT) Gains But Lags Market: What You Should Know

Abbott (ABT) closed the most recent trading day at $128.38, moving +1.29% from the previous trading session. This move lagged the S&P 500’s daily gain of 1.42%. At the same ... Read more »

OKTA Incurs Loss in Q3, Subscription Revenues Increase Y/Y

Okta, Inc. OKTA reported third-quarter fiscal 2022 adjusted loss of 7 cents per share that beat the Zacks Consensus Estimate by 69.6%. The company had reported earnings of 4 cents ... Read more »

How To Explain Crypto To Your Family Over Christmas Dinner

Imagine this scenario: it’s Christmas day, and you’re sitting around the dinner table with your family. You haven’t seen your family since this time last year, and you’re all done ... Read more »

Apple (AAPL) Stock Sinks As Market Gains: What You Should Know

In the latest trading session, Apple (AAPL) closed at $163.76, marking a -0.61% move from the previous day. This change lagged the S&P 500’s daily gain of 1.42%. Elsewhere, the ... Read more »

GameStop (GME) Gains But Lags Market: What You Should Know

GameStop (GME) closed the most recent trading day at $181.56, moving +0.96% from the previous trading session. This move lagged the S&P 500’s daily gain of 1.42%. At the same ... Read more »

Intel (INTC) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Intel (INTC) closed at $49.50, marking a +1.85% move from the previous day. The stock outpaced the S&P 500’s daily gain of 1.42%. Elsewhere, the ... Read more »

Restoration Hardware (RH) Stock Sinks As Market Gains: What You Should Know

Restoration Hardware (RH) closed at $560.75 in the latest trading session, marking a -0.73% move from the prior day. This move lagged the S&P 500’s daily gain of 1.42%. Elsewhere, ... Read more »

PPL Rides on Capital Investment Plans & Focus on Clean Energy

PPL Corporation’s PPL planned investments in strengthening infrastructure, increased focus on cleaner energy generation and growth in domestic operation are likely to enhance its existing operations.The Zacks Consensus Estimate for ... Read more »

Robinhood Markets, Inc. (HOOD) Gains But Lags Market: What You Should Know

Robinhood Markets, Inc. (HOOD) closed the most recent trading day at $24.20, moving +1.13% from the previous trading session. This move lagged the S&P 500’s daily gain of 1.42%. Elsewhere, ... Read more »

Stock futures rise ahead of November jobs report as omicron concerns loom

A trader works on the trading floor of the New York Stock Exchange in New York, Nov. 30, 2021. Michael Nagle | Xinhua News Agency | Getty Images Stock futures ... Read more »

Stocks making the biggest moves after hours: Ulta, Marvell, DocuSign and more

Florida, Port St Lucie, The Landing at Tradition, outdoor mall, Ulta, beauty cosmetics store.Jeff Greenberg | Universal Images Group | Getty Images Check out the companies making headlines after the ... Read more »

S. Korea's foreign reserves down for 1st time in 5 months in November

SEOUL, Dec. 3 (Yonhap) — South Korea’s foreign reserves shrank for the first time in five months in November due to a decline in the dollar-converted value of assets denominated ... Read more »

How to avoid a tax bomb when selling your home

courtneyk | E+ | Getty Images With soaring home values, many sellers expect a sizable profit when listing their property. However, capital gains taxes may put a damper on their ... Read more »

Leaving a job? What to do so you don't misplace retirement savings

sturti | E+ | Getty Images As millions of Americans quit their jobs in favor of taking time off, finding a new job or even starting their own business, financial ... Read more »

Selfridges owners in talks to sell to Thai conglomerate for £4bn

Deal with Central Retail group includes department stores in London, Birmingham and Manchester The family owners of Selfridges are in final talks to sell the luxury department store group to ... Read more »

Jim Chanos says he initiated a short position in DraftKings

Jim ChanosScott Mlyn | CNBC Jim Chanos said Thursday that he opened a short bet against DraftKings. Read more »

More than $87 billion in federal benefits siphoned from unemployment system, says Labor Department

Mike Stocker/South Florida Sun Sentinel/Tribune News Service via Getty Images More than $87 billion in unemployment benefits funded by the federal government was likely siphoned from the system during the ... Read more »

Goldman Sachs ups diversity targets as demographic data improves

FILE PHOTO: The Goldman Sachs logo is displayed on a post above the floor of the New York Stock Exchange By Ross Kerber (Reuters) – Goldman Sachs Group Inc on ... Read more »

Exclusive-KNDS readies 650 million euro binding bid for Leonardo units - sources

FILE PHOTO: A logo of defence group Leonardo is pictured on their booth during EBACE in Geneva By Angelo Amante, Francesca Landini and Elisa Anzolin ROME (Reuters) – KMW+Nexter Defence ... Read more »

Microsoft Windows starts telling users off if they try to download Google's Chrome browser

The move would see the UK diverge from some parts of the EU’s General Data Protection Regulation (Yui Mok/PA) (PA Archive) Microsoft has started telling off Windows users if they ... Read more »

Europe's markets swing back lower as Omicron concerns continue

European traders saw the tide turn once again as markets across the continent finished the session in the red. The u-turn following Wednesday’s rebound was driven by concerns over the ... Read more »

Opec agrees to pump more oil but factors in cuts owing to Omicron

Photograph: Ahmed Jadallah/Reuters Oil cartel will put stop to planned increase if new Covid variant leads to further travel and trade restrictions The Opec cartel and its allies have agreed ... Read more »

The shape-shifting virus moulding our economy as we alter our patterns

Photograph: James Veysey/Rex/Shutterstock Omicron’s arrival highlights how each wave of Covid-19 embeds structural changes in how the economy works Christmas parties are being cancelled. Restaurants are reporting an increase in ... Read more »

Tell us: have you experienced issues with delivery of large household items?

Photograph: Realimage/Alamy Have you experienced problems with the supply of large household items such as beds or sofas or perhaps another large purchase that you were hoping to receive before ... Read more »

Abrdn to buy online platform Interactive Investor for £1.5bn

Photograph: Dado Ruvić/Reuters Abrdn has struck a £1.5bn deal to buy the online investment platform Interactive Investor, as the fund manager pushes into the increasingly popular realm of web-based trading. ... Read more »

Here are some money-saving tips for re-stocking your wardrobe as you head back to the office

Pavel Peskov / EyeEm | EyeEm | Getty Images The other day, combing through my old work wardrobe, I felt like an archeologist before ancient artifacts – I didn't even ... Read more »

Glencore widens review of assets, eyes acquisitions

FILE PHOTO: The logo of commodities trader Glencore is pictured in front of the company’s headquarters in Baar By Clara Denina and Zandi Shabalala LONDON (Reuters) – Miner and trader ... Read more »

Battery design breakthrough could make electric cars safer, cheaper and more environmentally sustainable

Lithium-ion batteries power everything from smartphones to electric cars but zinc-ion batteries could offer a cheaper and safer alternative (Getty Images/iStockphoto) A battery design breakthrough has opened up the possibility ... Read more »

EU fiscal rules should offer realistic debt reduction, be more growth friendly - ECB

FILE PHOTO: Specialists work on a crane in front of the European Central Bank (ECB) in Frankfurt, Germany BRUSSELS (Reuters) – The European Union should change its fiscal rules to ... Read more »

Philip Morris CEO does not need M&A to hit smoke free goals

FILE PHOTO: Electric tobacco heating system IQOS of cigarette maker Philip Morris Switzerland is displayed after a news conference in Bern By Dasha, Afanasieva and Siddharth Cavale (Reuters) – Philip ... Read more »

UK alcohol firms renew dry Christmas warning after no update on HGV crisis

Alcoholic drinks companies have issued fresh warnings that the Christmas supply of wine, spirits and beer could be disrupted, after the government refused to provide an update on efforts to ... Read more »

Twitter's stock is nearing a bottom, trader says after Ark Invest buy-in

Twitter is nearing a turning point, says one top strategist. Shares of the social media company hit lows not seen since 2020 on Thursday, extending a decline that began in ... Read more »

Don't overlook 2021 required withdrawals from your retirement accounts. Here's what to know

Yellow Dog Productions | Getty Images Amid the hustle and bustle of the holiday season, don't forget about required minimum distributions from your retirement accounts. After being waived for 2020, ... Read more »

ADB approves Rs 3,752 cr funding to govt for enhancing quality of school education

Asian Development Bank (ADB) has approved nearly Rs 3,752 crore funding to the government for enhancing quality of school education and also mitigate the impact of coronavirus pandemic on students’ ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic