Monday, April 11, 2011
Trump's Tax Plan: One-Time 14.25% Net Worth Tax on Those With Over $10m
CNN Billionaire businessman Donald Trump has a plan to pay off the national debt, grant a middle class a tax cut, and keep Social Security afloat tax rich people like himself.
Trump .. is proposing a onetime net worth tax on individuals and trusts worth $10 million or more. By Trumps calculations, his proposed 14.25% levy on such net worth would raise $5.7 trillion and wipe out the debt in one full swoop. ... Trump would exempt the value of an individuals principal home from the net worth total.
By my calculations, 1% of Americans, who control 90% of the wealth in this country, would be affected by my plan, Trump said. The other 99% of the people would get deep reductions in their federal income taxes, he said.
https://taxprof.typepad.com/taxprof_blog/2011/04/trumps.html
Comments
How about taxing the federal reserve for all the money they have made (stolen). Lets have the IRS, or better yet the U.S Treasury, audit them and apply penalties and interest against what they owe since they have refused to be audited and have never paid any taxes since their inception, and then abolish them. Then lets make goldman sachs and their banking buddies pay the US back the $23.7 trillion they stole in the first place and then got reimbursed for (at 8% interest too). Then implement tariffs and repeal NAFTA and GATT, revitalize manufacturing along with a manhattan stlyle project for cheap renewable and possibly free energy. Pull most of the military back into the US and let them train on the southern border. And finally enforce the immigration laws retroactively. The USA would be so cash rich it could pay off all its debts, completely fund medicare and social security, and drastically reduce future taxation of its citizens. And remeber this when you take money away from the 1% who generally have businesses and have already paid confiscatory tax rates, they have less money to pay their employess and reinvest in their companies. How about an 80% tax on billionaires assets like trump. Give that egomaniac a taste of his own medicine.
Posted by: Zvex | Apr 12, 2011 9:18:12 AM
Justin the Tax Lawyer seems to have overlooked the contradiction in suggesting an unapportioned tax on buildings would be constitutional and then citing Hylton for the proposition that such a tax would be a direct tax.
In addition, the dicta in Hylton has been expanded by the Court in other dicta: "While taxes levied upon or collected from persons because of their general ownership of property may be taken to be direct, Pollock v. Farmers Loan & Trust Company, 157 U.S. 429, 158 U.S. 601..." Bromley v. McCaughn, 280 U.S. 124 (1929)
Posted by: Guy Helvering | Apr 12, 2011 8:53:30 AM
At least Trump is proposing something. Me personally, I prefer a carrot than a stick. Here is another idea: Maybe Obama should create an honorary award or list for those who gift more than their tax liability.... It could be a public affair. Social pressure could cause a few of the wealthy to make gifts. Otherwise, why not a slightly higher charitable deduction for making direct gifts to the government? Just another idea.
Posted by: yahoo | Apr 11, 2011 9:44:33 PM
Unconstitutional?
Not under Hylton, as long as land is exempted.
If it is on intangibles and buildings, it is most likely Constitutional. To the other commenters above, you should read your case law before you declare something unconstitutional.
“[p]erhaps a direct tax, in the sense of the constitution, can mean nothing but a tax on something inseparably annexed to the soil, something capable of apportionment under all such circumstances. A land or a poll tax may be considered of this description"
Justice Iredell Hylton v. United States
Posted by: Justin the tax lawyer | Apr 11, 2011 5:27:51 PM
Ha! Good one! Yeah... Tax The Rich! DO THIS! , "they" outsourced all the jobs, live here in luxury on the backs of those they sold dreams to and just as "unconstitutionally" as this "tax" would be, it would be conciscienable to remedy their effect on from their greed on us... One time?! Okay, Then afterwards... 10% FLAT TAX for EVERYONE going forward... NO OFFSHORE BS AND NO DEDUCTIONS! PONY UP LIKE AN AMERICAN that actually IS investing in their beloved country... OR GET THE FREEK OUT!Whle you're at it Don, BURN THE PATRIOT ACT, REINSTATE the ECOLOGICAL LAWS and legal protections that CHENEY EVISCERATED (Paving the way for big ENERGY) and massive ecological dmages HE KNEW WOULD OCCUR... Make tax incentives for COMPETITIVE ALTERNATIVE ENERGY, to THWART BIG OIL.. Make MADE IN USA mean something again. Lastly, Forge and free our youth in the public schools, by KILLING NCLB and making Technology and SCIENCE MATH AND TECHNOLOGY (as well as the arts and languages) an AMERICAN standard to lead the rest of the world as we are the TRULY FREE and will Lead by rolling up our sleeves and exemplifying REAL CHANGE... (NOT CHUMP CHANGE!)
Posted by: mosel | Apr 11, 2011 4:21:48 PM
I wonder if that was back in the days when the Donald was coming away from near bankruptcy.
His dad stepped in to give him an "interest free loan" with great security by buying millions of dollars worth of chips from Donald's casino and then had Brinks truck them back to a NYC vault. I always wondered if Sec. 7872 hit this.
Posted by: Bill | Apr 11, 2011 11:29:23 AM
Moral hazard.
Any reform or proposed solution that lacks fundamental controls on spending doesn't solve the problem, it only kicks it down the road and leaves Congress free from accountability.
Moreover, it offends private property rights.
Posted by: James | Apr 11, 2011 10:59:23 AM
I didn't notice the timeline of the original article, I just remembered he had proposed this in the past. A national debt of a mere $ 5.6 Trillion , those were the days.
Posted by: Hugh Dudgeon | Apr 11, 2011 10:50:45 AM
So the minuses are:
1) Its unconstitutional without an ammendment.
2) It will crash the market hard
3) It will cause capital flight as everybody with money tries to get it out of the US.
So other than the illegality and the disaster-promoting aspects of this....
Posted by: Georg Felis | Apr 11, 2011 10:43:14 AM
Why would it require a Constitutional amendment? The Constitution has been null and void for decades.
Posted by: j r | Apr 11, 2011 9:53:34 AM
So you tax 14.25 per cent on the net worth, I.e. Liquid and non liquid assets. The people then have to liquidate assets to pay the tax. Who has the money to do that? The banksters. Really bright idea Donald. So this guy thinks he can be president. Give me a break.
Posted by: Kenneth Varley | Apr 11, 2011 9:35:42 AM
This would require a Constitutional amendment, which would naturally state that it was a one-time tax. Until the next such amendment, that is.
I am not convinced that forced liquidation of 14% or more of the assets held by the wealthy would not crash the economy. Who is going to buy them, and with what money?
Posted by: AMTbuff | Apr 11, 2011 9:16:15 AM
Of course that exempts people who are so leveraged that their net worth is negative. Even if they have billions in real estate.
Posted by: George W | Apr 11, 2011 9:08:50 AM
Last week, after watching Michael Moore's "Capitalism: A Love Story", I tweeted the following.
"#Taxing high income as a proxy for taxing wealth keeps already wealthy folks above of up and comers. Bought politicians keep this hurdle up."
I never thought anyone would ever have the huevos to actually propose taxing wealth instead of income. Trump deserves praise for merely bringing this to the table, even if it smacks of nationalization.
Posted by: The Comedian | Apr 11, 2011 9:06:07 AM
So, if we have one time 14.25x3=42.75% tax, we can get rid of the National Debt, and we would be like China.
Posted by: Supratik Bose | Apr 11, 2011 8:30:27 AM
This isn't the first time Trump has proposed this.
I've no direct experience, but I'm sure the top 1% don't have 15% of their assets sitting in cash. In the unlikely event this would go through, they would have to sell something. If it were me, the first thing I would do would be to redeem any US Treasuries. So we would have to borrow more money from the Chinese to collect some portion this tax. Other assets sold would result in a drop of the Dow, NASDAQ and other markets. Commercial Real Estate would take a hit. It would be deflationary - a lot of stuff on the market with no buyers (except for the Chinese and the Saudi royalty).
Still, the idea has a certain appeal.
Posted by: Hugh Dudgeon | Apr 11, 2011 8:09:04 AM
Does Trump realize that such a tax would be a direct tax under the Constitution and absent a constitutional amendment would need to be apportioned?
Posted by: Guy Helvering | Apr 11, 2011 7:43:43 AM
I'm always amused at how rich 'socially conscious' folks are all for forcibly confiscating their neighbor's wealth instead of voluntarily donating their own.
Trump in '99, Buffet all the time, Jobs, Gates, etc.
If they feel so bad about their money, DONATE IT. Nothing prevents them from giving Uncle Sam more than he's demanding.
Posted by: Chad | Apr 11, 2011 7:25:35 AM
This is from 1999. Has he said anything recently about this?
Posted by: Carol | Apr 11, 2011 7:21:23 AM
I want Trump to become President so that I can watch him on television sitting in his conference room firing worthless federal employees.
Posted by: Woody | Apr 12, 2011 10:55:12 AM