As a way to be 'fair,' President Biden wants a wealth tax. It goes against the Constitution and hurts the business.
No one expects lawmakers to be honest, but "the rich pay less taxes than you" is one of the biggest lies that President Joe Biden, members of his party, and people who repeat what they say say. This carefully crafted statement is meant to stir up emotions over facts to get people to support a wealth tax, even though it is unconstitutional and didn't get much support when Elizabeth Warren first proposed it in 2020 and was soundly defeated in the Democrat primaries that year.
Manipulation 1: Lying through Omission
"The rich pay less taxes than you" makes it sound like a CEO on Wall Street pays less in taxes than a manager at McDonald's. But when article writers and politicians say this and back it up with facts, it turns out that they are talking about tax rates.The tax rate on capital gains is less than the tax rate on income. At the moment, the highest tax bracket for income is 37%, while the highest tax bracket for capital gains is 20%. This is because long-term capital gains (kept for more than a year) are taxed less than income. Capital gains come in the form of assets like investments, stocks, and real estate, and they are only paid out when the investment is realized and cashed out.
For instance, if you bought a piece of land for $100,000 and sold it two years later for $200,000, you would have to pay 20% tax on the extra $100,000 you made from the sale. And it's important to remember that for most Americans, the first $100,000 would have come from money they saved after paying taxes.
One claim you might hear is that Warren Buffet only pays a tax rate of 20% because his money comes from capital gains, while his secretary pays a tax rate of 37% (she would have to make more than $400,000 a year for that to happen), so she pays more taxes than him. In 2011, Warren Buffet told Congress that he had made $62.1 million in 2010. Twenty percent of that amount is $12,420,000, while 37 percent of $400,000 is $148,000. When measured in dollars, Warren Buffet's yearly tax bill is higher than that of his imagined secretary.
Manipulation 2: Confusing Unrealized Gains with Income
In response to President Biden's proposal for a billionaire minimum income tax, the White House website complains that the current tax code rewards wealth instead of work because workers pay taxes on the money they earn (realize) while investors don't pay any taxes on their investments as they grow in value until they are realized (cashed out). In the name of fairness, they want the ultrawealthy to pay more money to the government each year. They say this is needed because "billionaires pay 8 percent of their total realized and unrealized income in taxes, while a teacher or firefighter could pay more than double that." This sentence is meant to trick you because it is technically false.Under the way our tax system works now, we only pay taxes on money when it comes in. Unrealized money is not taxed because that would be a wealth tax, which is against the Constitution. This comment, which came straight from the White House's website, is an example of the strategy of telling a lie over and over again until people start to believe it.
Wealth taxes cause a lot of trouble. Putting aside the moral issues, one of the biggest problems is that it is a tax on deferred gains, which can change in value and are hard to estimate. You could have bought one share of Disney stock for $100 in 2020, and it would have been worth $200 in 2021 and less than $90 in 2022. Under a wealth tax system, you would have paid taxes on a gain you never got to enjoy and then lost money that you probably wouldn't get back. Under our present system, you don't have a real gain or loss until you sell.
Manipulation 3: The Rich Do Not Pay Their Fair Share
The rich don't pay their fair share of taxes is a statement that is meant to stir up the emotions of the people. But no one who says this is ready to give a percentage, dollar amount, or even a definition of what "fair" means. But when you look at income tax figures, it's clear that half of US taxpayers are paying for the other half by paying most of the tax money. This half is the top, and in 2020, they paid 97.7% of all government income.The top 1% of earners, who are often seen as bad, paid more than the bottom 90%, who made $450 billion less. The top 10 percent of earners brought in more than 60 percent of all money. There are a lot of Americans who aren't paying their fair share, but the truth is totally different from what most people think.
Wealth Taxes Destroy Freedom
The goal of this kind of trickery is to get people to agree with a wealth tax. People tell us that a wealth tax would be great because it would only be paid for by the very wealthy, while the rest of us could enjoy the rewards without taking any risk. But a wealth tax would go against the idea that people should own their own land. If private property is seen as a public resource where the needs of the many are more important than the needs of the few, then political agents could use it against their opponents and start down the path to tyranny.There was also talk about income taxes.ught by the public because they were told that only the superrich would pay it. Experience has shown us differently. Likewise, if an incredibly radical concept like wealth tax is really needed because decreasing the deficit has become a priority for those who have reliably increased it from year to year, then the fastest and most efficient alternative to meet this objective would be to cut spending.
