Kaine, Warner should urge Biden to drop federal asset tax

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By Ian Lovejoy

The federal tax on President Biden’s assets, which is being marketed as a tax on billionaires, could actually be imposed on millions of hard-working Americans, evolving to hit anyone who has a job or owns some form of income. ‘assets.

The difference between the federal asset tax and the normal income tax we all pay is that it would be based on income combined with the increase in the value of the assets, even if those gains are not realized. , such as property that has increased in value but has not been sold during the tax year. It’s a big difference.

Think about the equity in your home over the past year, the past five years, or the past ten years. Now imagine the federal government taxing that capital gain every year! Under the new federal tax on Biden assets, equity that you never realized, but only exists on paper, would now be taxable. What seemed unimaginable has now become reality.

Small businesses could also be taxed, again, for the value of their assets; inventory, machinery, even intellectual property, anything the IRS could claim to have value, would be taxed.

Descendants of successful farmers and business owners could face tax bills they are unable to pay, forcing them to sell assets they have owned for decades to raise the funds needed to maintain the IRS remotely.

And imagine the chaos as bureaucrats are given the power to set these estimated values. It’s almost impossible for business owners to passively accept a tax bill based on an arbitrary asset value handed down by someone far less familiar with a farm, business, or intellectual property than the people who created and created it. sometimes worked for generations. The whole thing is undoubtedly heading towards lengthy court battles that could take years to resolve.

That is if the courts allow federal tax on assets to stand in the first place. The 16th Amendment to the United States Constitution gives the federal government the power to levy income taxes. It says nothing about allowing them to tell someone what they think their property is worth and then handing them a bill for 20% of its value. It is very doubtful that the Supreme Court justices will allow the government to get away with this excess of power.

There are many flaws in this flip-flop tax strategy. For example, how would losses be handled? As we all know, property does not increase in a smooth, straight line over time. When the government’s estimate of the value of an asset goes down, will it be as eager to give a refund to those taxpayers as it was to tax them the year before?

President Biden touts the plan as a way to make the tax system fairer, to force wealthy Americans to “pay their fair share,” but taxing unrealized capital gains is un-American and effectively limits success. Adding an asset tax to the already heavy tax burden on US producers and employers would hamper job creation and slow economic recovery.

The federal asset tax would do far more harm than good in Virginia. Senators Mark Warner, Tim Kaine, and the entire Virginia congressional delegation should do whatever they can to pressure the president to drop this misguided proposal.

Ian Lovejoy is the 2023 candidate for the Virginia State Senate and a former member of the Manassas City Council.

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