Elizabeth Warren calls out Jeff Bezos in her latest wealth tax campaign: ‘I’m looking at you’

Sen. Elizabeth Warren and Amazon CEO Jeff Bezos.
Sen. Elizabeth Warren and former Amazon CEO Jeff Bezos.

  • In a CNBC interview on wealth taxes, Sen. Elizabeth Warren again called out Jeff Bezos.
  • Warren has repeatedly criticized Bezos over how much he pays in taxes, especially following his space adventure.
  • Under Warren’s proposed measure, Bezos would have paid $5.7 billion in taxes in 2020.
  • See more stories on Insider’s business page.

In an interview with CNBC’s Squawk Box, Sen. Elizabeth Warren again took aim at now-earthbound billionaire Jeff Bezos in her latest push for a wealth tax.

When it comes to taxing the assets of America’s wealthiest, Warren said, “it shouldn’t make a difference whether you have real estate, or whether you have cash, or whether you have a bazillion shares of Amazon.”

“Yes, Jeff Bezos, I’m looking at you,” she said.

Warren has repeatedly taken aim at billionaire Bezos over how much he pays in taxes. ProPublica recently revealed that Bezos reportedly did not pay income taxes for two years, and that he received a $4,000 tax credit in 2011 meant for families earning under $100,000.

Earlier this week, Warren tweeted that “the richest guy on Earth can launch himself into space while over half the country lives paycheck to paycheck, nearly 43 million are saddled with student debt, and child care costs force millions out of work. He can afford to pitch in so everyone else gets a chance.”

She also criticized his comments thanking every Amazon employee and customer for funding his foray, where Bezos said “you guys paid for all of this.”

“Jeff Bezos forgot to thank all the hardworking Americans who actually paid taxes to keep this country running while he and Amazon paid nothing,” Warren tweeted.

Amazon did not immediately respond to Insider’s request for comment.

Warren has repeatedly called for a wealth tax

Warren campaigned on a wealth tax in her failed 2020 presidential run, and continues to push for legislation that targets America’s highest earners.

Under her most recent proposal, the Ultra-Millionaire Tax Act, households with a net worth of $50 million or more would see at least a 2% tax on their assets. Those with over $1 billion would have a 3% tax – what Warren called a “tiny little tax” on CNBC.

“But notice, if we put that tiny little tax in place, that would be enough to pay for universal childcare, enough to pay for our kids to be able to go to college, enough for us to pay for all of those roads and bridges and bring them into the 21st century,” Warren said.

Wealth taxes, and taxes on high-earners, have recently claimed the spotlight amidst a push to fund President Joe Biden’s infrastructure package. While Biden did not propose an outright wealth tax, some of his measures would target America’s highest earners. He also proposed increasing IRS funding, which could raise an additional $700 billion over 10 years. Those proposals came after a study from IRS researchers and academics found the top 1% of Americans fail to report about a quarter of their income to the IRS.

Per an analysis from Americans for Tax Fairness and the Institute for Policy Studies Project on Inequality found that, Bezos would have ponied up $5.7 billion in taxes in 2020 under Warren’s wealth tax.

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Elizabeth Warren bashed cryptocurrencies’ environmental impact, said big tech firms should be broken up, and called for a wealth tax in a new interview. Here are the 8 best quotes.

Elizabeth Warren
Elizabeth Warren

  • Elizabeth Warren sat down for an interview with Yahoo Finance on Thursday.
  • The Democratic Senator from Mass. said that big tech companies are a “threat to our democracy” and should be broken up.
  • Warren also bashed bitcoin’s environmental impact and reiterated her calls for a wealth tax. Detailed below are her eight best quotes.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Elizabeth Warren sat down for an interview with Yahoo Finance’s editor-in-chief Andrew Serwer on Thursday and laid into big tech companies, cryptocurrencies, and the ultra-wealthy.

Warren said that she was happy that Trump has been removed from Facebook, but questioned the power of big tech companies to be able to make that choice.

The Democratic Senator from Massachusetts also touched on inflation, arguing concerns are overblown and only being mentioned because of democratic spending programs.

Warren then discussed some of her concerns around Robinhood and retail investing, and called for a wealth tax on top US earners.

Here are Warren’s 8 best quotes from the interview, lightly edited and condensed for clarity:

  1. “I also think with bitcoin and the other cryptocurrencies, I think there’s a real issue about the environmental impact as well. This whole notion of how much energy is consumed just to keep the currency tracking going, you know, you don’t consume that kind of energy in order to have money on deposit at a bank or a mutual fund. In that sense, bitcoin is very different and in the 21st century we’re becoming a lot more sensitive to the worldwide impacts of the choices we make.”
  2. “Well, first, I’m glad that Donald Trump’s not going to be on Facebook, suits me. But part two is that this is a further demonstration that these giant tech companies are way, way, way to powerful. And listen to the arrogance of it. The name of the group that made this decision is called ‘the Supreme Court.'”
  3. “We need to break up these big tech companies and we need to do it for two reasons. One is a pretty straightforward economic reason…Amazon’s the easiest one…You want to buy or sell goods on that platform you have to go to Amazon. Amazon makes money doing that, but they also rake off all the information…so Amazon goes let’s see what else is happening here. Andy is running a pet food business…it’s turning out really good so we’ll just turn this into NBO’s pet food business and move Andy back to page seven and just scoop up all the business. Anticompetitive. So they need to be broken up in order to keep commerce flourishing. You can either run the platform or compete in the businesses, but you don’t get to do both at the same time.”
  4. “The second reason we need to break these guys up is how much political power they have. The idea that they get to decide whose voice gets heard and who doesn’t and they do that on their own with something they call a ‘supreme court.’ No, no, they have too much influence and they pose a threat to our democracy.”
  5. “No, look every time democrats talk about making investments into the economy a bunch of Republicans, and Larry Summers, stand up and say ‘oh inflation.’ Notice they don’t talk about it during tax cuts…if inflation moves we have a lot of tools to deal with it.”
  6. “My principle issue with Robinhood is how much they actually disclose to their customer about how their customers’ data and trades are being used. I worry a lot about these companies that get out and appear one kind of good guy model and it actually turns out they are not this little scrappy upstart they are actually fronting for giant companies that are making money, not only in the trades, but making money harvesting the information ahead of everyone else in terms of what those trades are doing.”
  7. “What I want to see here is I want to see the SEC take a close look. I think it’s time for the SEC to update its regulations on disclosure but also on what business models ought to be permissible in a market.”
  8. “We need a wealth tax in America…the difference between the top and the bottom in income is big, but the difference between the top and the bottom in wealth is orders of magnitude bigger….I have proposed a wealth tax, a two percent tax on fortunes above $50 million, a little bit more if you have a billion or more in assets. That would produce $3 trillion in revenue over ten years.”

Read more: The head of global macro strategy at Delphi Digital breaks down why Bitcoin’s price has more room to run over the next 9 to 12 months in 4 charts – and shares what the next 10 years could look like for the emerging crypto economy

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Sen. Elizabeth Warren wants to grill the billionaire who said the rich would hide their assets from a wealth tax

elizabeth warren
  • Sen. Elizabeth Warren has invited billionaire and wealth tax critic Leon Cooperman to testify at a hearing.
  • Cooperman has been an outspoken critic of Warren and her wealth tax proposals.
  • The hearing, which is for the Senate Finance subcommittee Warren chairs, will examine taxes.
  • See more stories on Insider’s business page.

Sen. Elizabeth Warren has extended an invitation to one of her most vocal critics to debate her marquee policy, the wealth tax, on Capitol Hill.

On Monday, Warren invited billionaire Leon Cooperman to testify at a hearing for the Senate Finance Committee’s Subcommittee on Fiscal Responsibility and Economic Growth, which Warren chairs, first reported by CNBC. The hearing’s topic: “Creating Opportunity Through a Fairer Tax System.”

It’s the latest in an ongoing debate between the two. In a March CNBC segment, Cooperman criticized Warren’s Ultra-Millionaire Tax Act, which would levy additional taxes on households with net worths $50 million and over. He has also criticized Warren’s wealth tax advocacy, and wrote her a five-page letter in 2019 in response to a tweet she sent asking him to “pitch in a bit more.” Warren even incorporated Cooperman into one of her presidential campaign videos about the need for a wealth tax.

Cooperman’s perspective: The rich would hide their assets from a wealth tax

In March, Cooperman told CNBC: “If the wealth tax passes, go out and buy yourself some gold because people are going to rush to find ways of hiding their wealth.” This remark was in reference to his previous assertion that people would utilize gold as an asset for hiding their wealth.

He said that a wealth tax is “foolish,” has “no merit,” and that there are other, better ways to raise revenue, with eliminating waste as the best option.

“I don’t think it’s intelligent. I don’t think it’s legal,” he told CNBC of the wealth tax at the time.

leon cooperman crying about taxes on cnbc

Implementation issues – and whether the wealthy would simply dodge a wealth tax – have emerged as the two most prominent criticisms of Warren’s plan. Treasury Secretary Janet Yellen has previously cited the difficulty of implementing such a tax, although the Biden administration hasn’t explicitly ruled it out. A recent study from IRS researchers and economists found that the top 1% of Americans fail to report about 21% of their income. Over $1 trillion a year in taxes may be going uncollected, according to IRS Commissioner Charles Rettig.

Warren’s perspective: A wealth tax could help address inequality, and raise trillions

Warren campaigned on a wealth tax in the 2020 presidential campaign, and has continued to advocate for it as one measure to help address growing inequality during the pandemic. Her Ultra-Millionaire Tax Act could raise at least $3 trillion in the next 10 years, according to an analysis from economists Emmanuel Saez and Gabriel Zucman.

If the wealth tax had been implemented in 2020, it would have raised $114 billion from billionaires, according to an analysis from Americans for Tax Fairness (ATF) and the Institute for Policy Studies (IPS). Over the last 13 months alone, American billionaires have added $1.62 trillion to their collective net worths, according to a report from ATF/IPS.

A wealth tax is also a popular measure among Americans: A recent poll from Hill-HarrisX found that over half of Americans see a wealth tax as a way to address inequality. Wealth taxes have also gained traction internationally, with the International Monetary Fund saying one-off measures could help support economic recovery.

Now, the two may discuss their views at a Congressional hearing

Warren invited Cooperman to testify on this legislation at the April 27 hearing; and she asked him to RSVP by April 22.

“This hearing is an opportunity to share your views on how to strengthen the nation’s tax system to address economic inequality, raise revenues to fund critical pro-growth investments in families and communities, and bolster our long-term fiscal and economic outlooks,” she wrote in her invitation, which was viewed by Insider.

In a statement to CNBC, Cooperman said that he was “trying to determine whether she’s being objective or whether she’s just trying to promote her own agenda.” He added: “I’m a bit suspicious given how she never responded to the letter I sent her before.” Cooperman did not immediately respond to Insider’s request for comment.

In her invitation, Warren said that, “as we move expeditiously toward consideration of changes to our rigged tax code so that the wealthy pay their fair share, I believe you should be afforded the chance to present your perspective directly to Congress.”

She added: “The opportunity will allow you to fully air your views, not merely in front of the financial news audience where you often express them, but before the entirety of the American people.”

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Elon Musk would have paid $4.6 billion in 2020 under Warren’s wealth tax proposal, data shows

Elon Musk
Tesla and SpaceX CEO would be hit heavily by the tax.

  • Musk would have paid $4.6 billion in 2020 under Warren’s “ultra-millionaire” plan, tax groups said.
  • The Tesla and SpaceX CEO was worth at least $150 billion at the end of 2020.
  • Musk plans to use his fortunes to fund a future colony on Mars.
  • Visit the Business section of Insider for more stories.

Elon Musk would have paid $4.6 billion in 2020 under proposals for an “ultra-millionaire” tax, data from tax groups shows.

Sen. Elizabeth Warren of Massachusetts proposed the Ultra-Millionaire Tax Act Monday. It would apply an annual 2% tax on individual net worth between $50 million and $1 billion, or 3% on net worth above $1 billion.

If this tax had been in place in 2020, Musk would have paid the second most of all Americans, beaten only by departing Amazon CEO Jeff Bezos, Americans for Tax Fairness (ATF) and the Institute for Policy Studies (IPS) Project on Inequality said, basing their calculations on Forbes data. Musk would be followed by Microsoft co-founder Bill Gates and Facebook CEO Mark Zuckerberg, the groups said.

The nation’s roughly 650 billionaires have a collective wealth of more than $4.2 trillion, the groups said. Their fortunes have increased by about 44% since March 2020, when the pandemic lockdowns in the US started, and over a decade the wealth tax on those 650 billionaires alone would fund about three-quarters of President Joe Biden’s $1.9 trillion coronavirus relief package, the ATF and IPS said.

About a third of the wealth tax would be paid by the 15 richest Americans alone, who combined have a fortune of more than $2.1 trillion, they added.

Musk has grown richer and richer over the past year

At the end of 2020, Musk’s real-time worth was $153.5 billion according to Forbes and $170 billion, according to Bloomberg. Both rich lists said his wealth increased more than sixfold within a year.

Based on Forbes’ figures, Musk would have paid $4.6 billion last year under Warren’s proposal. Using Bloomberg’s figures, this would have been $5.1 billion.

Musk and Bezos have been flip-flopping as the world’s richest person since January. As of March 5, Bezos tops both Forbes and Bloomberg’s lists. Musk is worth $152.4 billion, according to Forbes and $162 billion, according to Bloomberg.

Musk made his fortune from his business empire. He is the CEO of both Tesla and SpaceX, founder of Neuralink, and co-founder of the Boring Company.

Though he takes the minimum legally allowed salary from Tesla, Musk’s compensation package awards him stock when Tesla achieves certain goals, making him the world’s highest-paid executive last year. He has a roughly 20% stake in Tesla, as well as 57 million vested Tesla stock options, according to Bloomberg.

He also has a 48% stake in his aerospace company, SpaceX. A February 2021 funding round valued SpaceX at $74 billion.

Musk has ambitious plans for his fortunes. In December, he told Mathias Döpfner, the CEO of Insider’s parent company, Axel Springer, that he was selling all his possessions to fund a future colony on Mars.

“In fact, I’ll have basically almost no possessions with a monetary value, apart from the stock in the companies,” Musk said. “If things are intense at work, I like just sleeping in the factory or the office. And I obviously need a place if my kids are there. So, I’ll just rent a place or something.”

Musk also recently sold several expensive pieces of property, including three neighboring homes in the Bel-Air neighborhood of Los Angeles.

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With a federal wealth tax looking unlikely, states like New York could enact their own

FILE PHOTO: New York City Mayor Bill De Blasio speaks to the media during a press conference In the Queens borough of New York City, New York, U.S., April 10, 2020. REUTERS/Eduardo Munoz
New York City Mayor Bill De Blasio speaks to the media.

  • New York’s Democratic lawmakers may be able to push through a state wealth tax, Bloomberg reports.
  • Debate over a federal wealth tax continues, but some areas are taking matters into their own hands.
  • Places like Arizona and San Francisco have already enacted their own taxes.
  • Visit the Business section of Insider for more stories.

New York legislators may be able to push through taxes on the ultrawealthy amidst the turmoil surrounding Gov. Andrew Cuomo, Bloomberg reports

Cuomo previously outlined a worst-case scenario where New York’s wealthiest would see the country’s highest income rate taxes if the White House didn’t step in to help with the budget deficit. During the pandemic, Cuomo has said he wanted to make sure New York’s tax base was preserved, and wealth taxes would not help in that regard.

Now, according to Bloomberg, New York’s Democratic lawmakers are considering a package that would “go further,” given that the governor is embroiled in a sexual-harassment scandal and a federal investigation into his handling of nursing homes during the pandemic.

Progressives in New York have been champing at the bit to increase taxes on the wealthy. New York City Mayor Bill de Blasio previously called for a progressive tax and a tax on billionaires in his final State of the City address. And New York representative Alexandria Ocasio-Cortez has previously called to raise the top marginal rate on those earning over $10 million.

“New York City will fight for new progressive income taxes that establish brackets with increased tax rates for high earners and the ultra-wealthy,” de Blasio said in a release on the address. “And with more billionaires than any other city in America, New York City will push for a billionaires’ tax. The billions of dollars raised from these progressive taxes will go into investing in New York City’s schools, working families, and a recovery for all of us.”

The Wall Street Journal reported in mid-February that some Democratic lawmakers in New York were coalescing around what’s called a mark-to-market tax on billionaires. Those billionaires would pay capital gains taxes annually on appreciating assets, not just at their sales.

As talk of a federal wealth tax grows, some places have already enacted them

Sen. Elizabeth Warren recently renewed her calls for a wealth tax, introducing the Ultra-Millionaire Tax Act with several other progressives. Under Warren’s plan, households with a net worth between $50 million and $1 billion would see a 2% tax, and households with a net worth over $1 billion would see a 3% tax.

Treasury Secretary Janet Yellen has said that a wealth tax poses “difficult” implementation problems, and it’s not favored by President Joe Biden. But some places in the US have already taken matters into their own hands.

San Francisco voters passed a tax in November on business owners and top executives who earn at least 100 times more than one of their average workers. Those CEOs earning 100 times more than their average worker would be taxed an additional 0.1% on business tax payments. The surcharge also increases to 0.1% of however much more they earn. 

And Arizona passed an additional income tax on its high-earners; all of the money raised will go to public and charter schools. The creators of that proposition estimated that it could bring in $940 million annually.

In Washington state, lawmakers are considering a net-worth tax that could generate up to $4.9 billion in revenue. One millionaire, Dan Price, is out advocating for it. “I’ve been demanding to Washington State to tax me more,” he told Insider’s Hayley Cuccinello.

So, while there may not ultimately be a federal wealth tax, a patchwork of state and city taxes on the wealthy could arise to take its place.

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Elizabeth Warren’s new wealth tax bill would have raised $114 billion from billionaires in 2020

elizabeth warren
Sen. Elizabeth Warren has continually advocated for a wealth tax.

  • Several Democrats just proposed a wealth tax that would apply to 0.05% of American households.
  • An analysis finds billionaires would have paid $114 billion in 2020 if the plan was in effect.
  • A wealth tax has been a popular proposal for addressing inequality but would face implementation issues.
  • Visit the Business section of Insider for more stories.

The newly proposed Ultra-Millionaire Tax Act would have raised $114 billion from American billionaires in 2020 if it had been in effect.

This projection comes from an analysis from Americans for Tax Fairness (ATF) and the Institute for Policy Studies (IPS). Looking at Forbes billionaire data, the analysis found that the wealth tax would raise $1.4 trillion over 10 years – and that billionaire wealth still would increase under the proposal. 

“If the past continues, billionaire wealth has grown much faster than the economy and wages overall, and that’s been true for 40 years,” Chuck Collins, the director of the program on inequality and the common good at IPS, told Insider. “In 1983, there were 18 billionaires.”

Sen. Elizabeth Warren, along with Reps. Pramila Jayapal and Brendan Boyle, introduced the act on Monday. Households with a net worth between $50 million and $1 billion would see a 2% tax, and those with a net worth over $1 billion would be taxed 3%. According to a press release, the tax would only apply to 0.05% of American households. 

A wealth tax was a key plank of Warren’s 2020 presidential platform. Critics voiced concern at the time over not just the constitutionality of such a tax, but whether it could even be effectively implemented. The latter concerns remain – in President Joe Biden’s administration, no less. Treasury Secretary Janet Yellen said last week it would be difficult to implement and that President Biden doesn’t favor it.

But the bill by progressive Democrats represents another attempt to address increasing inequality. In a press release for the bill, Representative Brendan Boyle said “the hyper concentration of wealth among a tiny number of multimillionaires and billionaires is a crisis for American capitalism and the American Dream.” 

Boyle added: “It is time for the ultra-millionaires to pay their fair share so that critical government programs can be bolstered to help the everyday American. Our proposal will make a meaningful difference in the lives of Americans who need the most help and bolster our country’s shrinking middle class.”

Concerns over constitutionality and implementation

Warren’s proposal also contains two letters from law professors on the constitutionality of such a tax, specifically addressing which clause from Article I would be applied.

Former Justice Dept. tax attorney James Mann previously told Insider’s Taylor Nicole Rogers that the constitutionality of the tax would probably end up debated in front of the Supreme Court.

Regarding implementation, Stephen Henley, senior managing director and national tax practice leader at CBIZ MHM, previously told Insider that such a wealth tax would require those wealthy individuals to value their net assets every year. “You can imagine having to go out and get values of all those assets every year would be an administrative nightmare,” he said.

In particular, people could come up with ways to devalue their assets, or hire appraisers that use methodologies that could benefit them. And the IRS may not have the manpower or bandwidth for the auditors who would audit those forms.

Collins said there would be “real” potential implementation difficulties, and “startup issues” with both the enforcement and creation of a “new tax regime … But then once it’s in place, I think it’s not that hard to update it on an annual basis.”

The bill also contains several anti-evasion measures, including a $100 billion investment in the IRS and a 30% minimum audit rate for those impacted by the tax.

Millionaire Liesel Pritzker Simmons – who would see higher taxes under Warren’s plan – has been a long time wealth tax advocate. Pritzker Simmons is an heiress of the Hyatt hotel empire fortune. She’s also the cofounder of and principal at Blue Haven Initiative, which invests in impact-driven groups and companies.

Regarding the concerns over implementation and enforcement, she told Insider, “I think every person that would be affected by this tax knows exactly how much money they have and exactly where it’s located.” 

Liesel Pritzker Simmons

Inequality has been growing during the pandemic, and a wealth tax could be a fix

Throughout the pandemic, American billionaires have seen major gains, adding $1.3 trillion to their collective net worths.

Overall, American billionaires are now worth $4.3 billion; the bottom half of the population holds just about $2.4 trillion in wealth. Globally, an Oxfam report found billionaires increased their wealth by $3.9 trillion from March 18, 2020, to December 30, 2020. 

That report also found that, while billionaires recouped all of their losses by November, recovery for the bottom could take up to a decade – and that a wealth tax was one step “towards a better world.” Warren herself has previously argued that a wealth tax is one way to invest and build in the future of the country and economy.

A wealth tax has also seen popular support: An Insider poll from February 2019 found that 54% of Americans supported Warren’s proposal. 

“Inequality is ballooning – I mean, the pandemic has laid this bare – but it didn’t just start with a pandemic. This has been going on for years. For me, why I really support a wealth tax is that I think it’s going to be good for the economy,” Pritzker Simmons said.  “We can see that trickle-down economics doesn’t work. We’ve seen this play out over the last 40 years.” 

She added: “I think that a policy fix is in order.” 

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Janet Yellen’s Treasury sees a wealth tax as too hard to implement, but she has other ideas on what to change

janet yellen fed
Janet Yellen.

  • Treasury Secretary Janet Yellen said she’s not planning a wealth tax like Elizabeth Warren’s.
  • Yellen told The New York Times that such a tax would have “very difficult implementation problems.”
  • But she is looking into other tax routes, including capital gains and the corporate tax. 
  • Visit the Business section of Insider for more stories.

Treasury Secretary Janet Yellen has indicated that a wealth tax is off the table, but she is looking at other potentially significant measures.

In an interview with The New York Times’ Andrew Ross Sorkin, Yellen said she wasn’t planning a wealth tax like Sen. Elizabeth Warren’s proposal because it’s “something that has very difficult implementation problems.”

Yellen also said during a virtual conference held by the Times that “a wealth tax has been discussed,” but it’s not favored by President Biden.

One major plank of Sen. Warren’s presidential run – and, later, Sen. Bernie Sanders’ run – was a wealth tax. Warren called for an “Ultra-Millionaire Tax” that would levy an annual 2% tax on households with net worths between $50 million and $1 billion. Households that have a net worth over $1 billion would have seen a 3% annual tax. Warren has renewed her calls for a wealth tax amidst the pandemic, as inequality grows along with the K-shaped recovery.

Stephen Henley, senior managing director and national tax practice leader at CBIZ MHM, told Insider that wealth taxes like Warren’s and Sanders’s would require wealthy individuals to value their net assets every year, similarly to how assets are valued for an estate tax when someone dies. With a wealth tax, that valuing would be annual – “not just when you die.”

“So somebody that might have $50 million or $100 million of wealth, you can imagine having to go out and get values of all those assets every year would be an administrative nightmare,” Henley said.

Many of those individuals may hold private assets in addition to public ones, another “administrative nightmare” for valuing assets.

“You can also see where that would be ripe for tax avoidance, and even tax evasion,” Henley said.

For instance, if the legislation didn’t require someone to get an appraisal, they’d have to come up with some way to devalue it. Or people could hire appraisers that know the appraisal is for a wealth tax, and “use certain methodologies that will benefit the client.”

Henley also added that the IRS “doesn’t have the manpower or the bandwidth” to increase their auditors, who would audit all of those forms. 

So if not a wealth tax, then what? Yellen has indicated that she’s open to some other ways to raise tax revenues. 

There may be some other potential changes on the horizon

The Times reports that Yellen is looking into ending one tax rule that could have a significant impact: the “stepped-up basis” on capital gains.

For this kind of tax, Henley gives the example of a piece of land that someone bought for hundreds of thousands of dollars years ago, but now it’s worth $5 million. The owner of that land then passes away, and the land is left to an heir. So even though the land has appreciated in value, it’s passed along to the heir at that current value of $5 million.

Under the current regime, there would be no capital gains tax on how much the land appreciated, even though in fact it would have gained millions of dollars in value. Instead, capital gains taxes would be measured “only on the change in the asset’s value relative to the stepped-up basis,” according to the Congressional Budget Office – aka, gains beyond that $5 million value at the time of inheritance.

“So in other words, if they were to immediately sell the land for $5 million after the will was probated, and they got the land, then they would pay no income tax on that,” Henley said. “No capital gains tax.”

The Times reports that Yellen “plans to explore stopping” that rule.

Henley said that, broadly, Biden’s plan to increase the capital gains tax would be easier to implement than a wealth tax.

“It would probably generate more revenue immediately,” Henley said, “because you’d have everybody that is subject to that threshold over $1 million, either a capital gain over $1 million or income over $1 million – they’d be taxing.”

Per Bloomberg, Yellen also said the Biden administration is looking to raise the corporate tax to 28%. As Insider’s Allana Akhtar previously reported, that increase to 28% from 21% has long been a part of Biden’s tax plan.

Yellen also addressed a financial-transactions tax, a measure which Sanders has said he would use to make college tuition free and ease student debt

“It could deter speculation but it might also have negative impacts,” she said, according to the Times.

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