Twelve Potential Biden Tax Changes to Keep an Eye On

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I'm not the only one who suspects that. Here are two law professors with expertise on tax law who have the same opinion:

https://www.nytimes.com/2019/11/07/opinion/wealth-tax-constitution.html

Of course, it doesn't matter if it's unconstitutional or not. Even if it is, all that matters is whether they can put in place enough judges that can support it.

As for Bitcoin, there's reason why it is the preferred currency of ransomware. If Iran can use it to evade SWIFT sanctions, pretty sure it can get around US govt confiscation. Now actually allowing whoever receives it to use it without tax / legal issues is another problem...might involve permanently leaving the country. But based on the direction the country is headed, give it another 10 years and that might not be a big sacrifice.

That's an interesting argument, although I feel like there are plenty of direct personal property taxes are already in place without proportionality. For example I imported a used boat I purchased outside the U.S. and paid the same tax based entirely on the value of the property (the boat) in FL as I would have in MI or CA. The wealth tax is really a bad idea not because it's unconstitutional, but because it's almost impossible to value the things wealthy people already store much of their wealth in and will store all their wealth in if this passes, namely real estate, private companies, and things like art. All are unique and it's very easy to manipulate values as a result.

As far as using Bitcoin to evade taxes, first off the blockchain is a public record of every BTC transaction ever made. So it's not terribly difficult to track your transactions and tumbling only goes so far. Some interesting articles on that here and here. However tracking the coin isn't even really necessary, unless all you want to do is hoard BTC. As you alluded to, once you spend money you didn't report they've got you, regardless of how you stored or moved it. That $2M house you afford on $40K in taxable income is a big red flag.

I am interested in what right wing utopia you plan to foist yourself upon? You know, how immigrants fleeing their economic situation are the scum of the earth and shouldn't be let in.....until you want some county to take you in because you don't like the economic situation in your country?

 

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That's an interesting argument, although I feel like there are plenty of direct personal property taxes are already in place without proportionality. For example I imported a used boat I purchased outside the U.S. and paid the same tax based entirely on the value of the property (the boat) in FL as I would have in MI or CA. The wealth tax is really a bad idea not because it's unconstitutional, but because it's almost impossible to value the things wealthy people already store much of their wealth in and will store all their wealth in if this passes, namely real estate, private companies, and things like art. All are unique and it's very easy to manipulate values as a result.

As far as using Bitcoin to evade taxes, first off the blockchain is a public record of every BTC transaction ever made. So it's not terribly difficult to track your transactions and tumbling only goes so far. Some interesting articles on that here and here. However tracking the coin isn't even really necessary, unless all you want to do is hoard BTC. As you alluded to, once you spend money you didn't report they've got you, regardless of how you stored or moved it. That $2M house you afford on $40K in taxable income is a big red flag.

I am interested in what right wing utopia you plan to foist yourself upon? You know, how immigrants fleeing their economic situation are the scum of the earth and shouldn't be let in.....until you want some county to take you in because you don't like the economic situation in your country?

I suspect the wealth tax will fail simply because people will end up spending more time protecting what wealth they currently have vs. applying their talents to productively generate new wealth. As far as Bitcoin, it is better suited for taking money out of the country (one-way). Yes, they can track it, but if they can't confiscate it (or the person who took it out), so what. If you just want to give your kids some wealth outside the estate or wealth tax, just give them gold bars and coins. That would be an estate-tax solution for high net worth individuals, but not really practical for ultra high net worth individuals.

I'm not sure why you view all immigrants fleeing their economic situation as the scum of the earth. Einstein came to the US after fleeing something far worse than an economic situation and the US greatly benefitted from his talents and hard work, and likely even saved a lot of American lives. Unfortunately, that mutually-beneficial relationship is not true of all people seeking entry into the US.

It's not necessary to find a utopia. I suspect even countries viewed as socialistic today might provide a better option for preserving wealth and rewarding productivity in the future relative to where the US is headed. The US is broke and spending huge sums of money it does not have. It's an unsustainable situation and it will eventually be forced to rely on taxation to fund popular programs. In a Democracy, people will simply vote away wealth of the minority (or anyone who has more wealth than they do) to fund whatever programs they want. Politicians will be happy to do it. So moving to a place where the average person is more self-sufficient, values education, and respects the property of others would likely be a better alternative. Singapore, Australia, Switzerland, and New Zealand come to mind, but I haven't really researched it.. Basically anywhere with a less-confiscatory tax policy than what I expect the US will have in the future.

 

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I suspect the wealth tax will fail simply because people will end up spending more time protecting what wealth they currently have vs. applying their talents to productively generate new wealth. As far as Bitcoin, it is better suited for taking money out of the country (one-way). Yes, they can track it, but if they can't confiscate it (or the person who took it out), so what. If you just want to give your kids some wealth outside the estate or wealth tax, just give them gold bars and coins. That would be an estate-tax solution for high net worth individuals, but not really practical for ultra high net worth individuals.

I'm not sure why you view all immigrants fleeing their economic situation as the scum of the earth. Einstein came to the US after fleeing something far worse than an economic situation and the US greatly benefitted from his talents and hard work, and likely even saved a lot of American lives. Unfortunately, that mutually-beneficial relationship is not true of all people seeking entry into the US.

It's not necessary to find a utopia. I suspect even countries viewed as socialistic today might provide a better option for preserving wealth and rewarding productivity in the future relative to where the US is headed. The US is broke and spending huge sums of money it does not have. It's an unsustainable situation and it will eventually be forced to rely on taxation to fund popular programs. In a Democracy, people will simply vote away wealth of the minority (or anyone who has more wealth than they do) to fund whatever programs they want. Politicians will be happy to do it. So moving to a place where the average person is more self-sufficient, values education, and respects the property of others would likely be a better alternative. Singapore, Australia, Switzerland, and New Zealand come to mind, but I haven't really researched it.. Basically anywhere with a less-confiscatory tax policy than what I expect the US will have in the future.

I'm sorry, I thought you were one of those conservatives who wants to stop at least the immigration of any brown skinned folks. I'm glad to hear you're fully in favor of dramatically expanding the H1B visa program to let any educated and hard working folks from other countries come here who want to, certainly anyone who is more educated than you? No way you could be against that, of course, if you feel you should be entitled to just move wherever you want, right?

You may also find it interesting that, should someplace like Australia take you in, you'd be paying 45% marginal rates on any income over $180,000 AUD, a GST of 10%, universal health care which costs another 1.5% levy, strict gun control, the religious right is ignored...Pretty much everything you're railing at potentially happening in the U.S. is already firmly in place there. New Zealand pretty much the same except far more liberal overall. Switzerland....one of the few places in the world with a wealth tax as it turns out. Ironic you'd choose that in an effort to flee the U.S. wealth tax! And Singapore is strongly considering one as well.

May I suggest Somalia? Right wing mecca with effectively no taxes, little to no intrusive government, no gun control, run by the religious right, free to be at least as sexist as you want without consequences, and they might even let you in! Short of that, the right wing in the U.S. has no concept how extreme right they are compared to the rest of the civilized world. Or how little anyone else in the civilized world would want what they see as right wing nuts from the U.S. immigrating to their country!

 

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I'm sorry, I thought you were one of those conservatives who wants to stop at least the immigration of any brown skinned folks. I'm glad to hear you're fully in favor of dramatically expanding the H1B visa program to let any educated and hard working folks from other countries come here who want to, certainly anyone who is more educated than you? No way you could be against that, of course, if you feel you should be entitled to just move wherever you want, right?

You may also find it interesting that, should someplace like Australia take you in, you'd be paying 45% marginal rates on any income over $180,000 AUD, a GST of 10%, universal health care which costs another 1.5% levy, strict gun control, the religious right is ignored...Pretty much everything you're railing at potentially happening in the U.S. is already firmly in place there. New Zealand pretty much the same except far more liberal overall. Switzerland....one of the few places in the world with a wealth tax as it turns out. Ironic you'd choose that in an effort to flee the U.S. wealth tax! And Singapore is strongly considering one as well.

May I suggest Somalia? Right wing mecca with effectively no taxes, little to no intrusive government, no gun control, run by the religious right, free to be at least as sexist as you want without consequences, and they might even let you in! Short of that, the right wing in the U.S. has no concept how extreme right they are compared to the rest of the civilized world. Or how little anyone else in the civilized world would want what they see as right wing nuts from the U.S. immigrating to their country!

I am in favor of expanding the H1B program. I have a few close friends from India. One guy had to wait over 10 years for his green card. He worked hard, paid taxes (I think he even paid social security and has never had the right to vote). H1B makes it hard to change jobs because you have to find someone to sponsor you...it was basically indentured servitude. The US needs more people like him and fewer people living off the system. Immigration should be purely merit based. So expand H1B, but get rid of family and lottery based immigration except for maybe only immediate family (wife, kids, that's it...no "chain" migration).

Honestly, I'm surprised about Switzerland. As I mentioned, I haven't really studied those countries, but just recalled that Switzerland, New Zealand, and Singapore had no capital gains tax (and I think no inheritance tax as well) and I did not hear any news about a wealth tax being implemented in those places. Apparently 12 ODEC countries had wealth taxes in 1990 and now only 3 still do. Even given that, I still suspect that those places will be better off than where the US is headed. I think I read by 2024, 70% of US spending will be supported by debt rather than taxation. That's not sustainable and even a wealth tax can't fix that unless it's implemented even at a very low level of wealth and a high rate. With Dem control of congress and the executive branch, we're spending trillions like we used to spend billions...and very little of it goes towards productive purposes...just pork and thousands of pet-project earmarks to bail out poorly run cities and states. Those other countries don't have a massive military to support and are in far better financial shape than the US. Although Singapore debt to GDP is getting high, it sounds like they are more likely to increase the goods and services tax rather than implement a wealth tax. The other reason that I mentioned those 4 other countries is that they rank higher for academic achievement in math and science than the US.

https://www.pewresearch.org/fact-tank/2017/02/15/u-s-students-internationally-math-science/

That reflects cultural values and is a good leading indicator for the direction in which the country is headed. Meanwhile, one of the wealthiest people in the US is funding an organization seeking to destroy math because it's too "white": https://www.zerohedge.com/political/there-no-such-thing-white-math

Somalia? Come on...then Venezuela would be the ideal socialist mecca. Cayman Islands, Belize, or maybe even Bermuda if you're open to less popular US expat destinations.