Wednesday, December 2

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Budget 2019: Tax cuts can help build long-term wealth
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Budget 2019: Tax cuts can help build long-term wealth

The Budget 2019 proposal on the income tax rebate is most beneficial for the lower and middle income group – and is estimated to put 3 crore tax payers out of the tax bracket. As expected, the Interim Budget for FY2019-20 was aimed at pleasing farmers as well as the middle class. The proposal is to offer full income tax rebate for taxable income up to Rs 5 Lakh. Individuals with taxable income between Rs 2.5 lakh and Rs 5 lakh can save up to Rs 12,500 in taxes, giving them a higher disposable income. In addition, standard deduction for salaried employees has been increased from Rs 40,000 to Rs 50,000. To read more
Warren Starts 2020 Bid, Vows to End System `Rigged’ by Rich
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Warren Starts 2020 Bid, Vows to End System `Rigged’ by Rich

Senator Elizabeth Warren made it official on Saturday: She’s running for president to change a country she says is “rigged by the wealthy.” She quickly drew the attention of President Donald Trump’s re-election campaign. The Massachusetts Democrat announced during a speech in Lawrence, a former manufacturing hub and symbol of the U.S. labor movement in her home state, that she’s seeking her party’s nomination to challenge Trump in 2020. To Read More
The Problem With Elizabeth Warren’s Wealth Tax
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The Problem With Elizabeth Warren’s Wealth Tax

“America will never be a socialist country,” President Donald Trump proclaimed in this week’s State of the Union Speech. Regardless of how much truth we see in this statement, there is little question who these words were directed at. As the Democratic Party has shifted continuously to the left over the last years, it has welcomed politicians to its club who dub themselves as flat-out socialists. Today’s stars of the Democrats are not the Clinton’s and Pelosi’s anymore, but Bernie Sanders, Alexandria Ocasio-Cortez, and Kamala Harris. Read More
Calls to ‘abolish billionaires’ raise eyebrows, but they’ve been a long time coming
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Calls to ‘abolish billionaires’ raise eyebrows, but they’ve been a long time coming

For the first time on a large scale, Americans are debating whether to allow the existence of billionaires. On Thursday, The New York Times published columnist Farhad Manjoo's "It's high time we abolish billionaires" above the fold on the front pageof its print edition. While Manjoo is far from the first person to articulate the idea — see freshman congresswoman Alexandria Ocasio-Cortez's call for a 70% tax rate for income above $10 million or Sen. Elizabeth Warren's call for a 3% wealth tax for fortunes above $1 billion — the unequivocal rallying cry was something different for the paper of record Read More
Democrats go bold on economic plans, a deliberate contrast to 2016
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Democrats go bold on economic plans, a deliberate contrast to 2016

Asked what her very first act as president would be, Sen. Kamala Harris had a quick answer at a recent televised town hall: enact a tax cut that would boost incomes for working families by as much as $6,000 a year. Sen. Elizabeth Warren followed the launch of her campaign by unveiling a tax on the super-rich that backers say could raise as much as $275 billion a year. Read More
What does the U.S. need? Higher taxes
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What does the U.S. need? Higher taxes

If you’ve consumed any news this year, you’ve heard about U.S. Congresswoman Alexandria Ocasio-Cortez’s signature proposal to raise her country’s top income-tax rate to 70 per cent. The idea, from the standard bearer for the millennial wing of the Democratic Party, has right-wing commentators apoplectic – “my God, it’s socialism!” – and many of the left cheering – “thank God, it’s socialism!” Meanwhile, Senator and presidential hopeful Elizabeth Warren is calling for a new tax on wealth – but on capital rather than annual income. It’s generating a similar respons To Read More
Rampell: Warren wasn’t first on wealth tax
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Rampell: Warren wasn’t first on wealth tax

A brash political candidate forms a presidential exploratory committee. Almost immediately, the candidate announces a controversial policy: a wealth tax on the ultrarich. Just 1 1/2 pages long, the proposal is met with some cheers but lots of jeers — about its constitutionality, feasibility, fairness. Right-wing pundits bemoan the appeal to class warfare. To Read More
Wealth taxes are back in fashion – but they’re still a terrible idea
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Wealth taxes are back in fashion – but they’re still a terrible idea

Wealth taxes are back in fashion. In the United States, Senator Elizabeth Warren is proposing an ‘ultra-millionaire tax’. In the UK, there are calls for greater taxation of property from a coalition stretching from Lord Willetts, a former Conservative minister, to Owen Jones and other Corbynista activists. I say ‘back’ in fashion, because these taxes appear to be subject to a cycle of sorts – endlessly proposed, debated, then… quietly set aside. Most of the recent UK examples have focused on property. The Tories’ ‘dementia tax’ – a phrase coined by Policy Exchange’s Will Heaven in The Spectator – is remembered all too well from the ill-fated 2017 election. Before that there was Ed Miliband’s ‘mansion tax’, proposed in 2013, which was to be targeted at homes over £2m in value....
Elizabeth Warren And The Terrible, Horrible, No Good, Very Bad ‘Wealth Tax’ Idea
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Elizabeth Warren And The Terrible, Horrible, No Good, Very Bad ‘Wealth Tax’ Idea

Recently, Elizabeth Warren unveiled a bold plan to help close the nation’s wealth gap. Although the proposal by Warren is still in its infancy, the basic premise would be to levy an annual tax for the ultra-wealthy, based upon the value of their wealth. Households with more than $50 million of net worth would be liable for a 2% tax on that wealth. And for the super-duper-ultra-wealthy – households with a net worth of more than $1 billion – that tax would be increased to 3%. It’s estimated that Senator Warren’s proposal would “only” impact about 0.1% of U.S. households. However, that still means the tax could hit nearly 75,000 households, a staggeringly high number of households when you consider the extreme wealth it would take to become subject to the tax in the first place....
The Best Way to Tax Wealth Isn’t a Wealth Tax
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The Best Way to Tax Wealth Isn’t a Wealth Tax

Senator Elizabeth Warren’s proposed wealth tax is a more promising idea, I think, than Alexandria Ocasio-Cortez’s plan for a top marginal income-tax rate of 70 percent. A levy that high on very high incomes is likely to be fiscally self-defeating, but an annual 2-3 percent tax on wealth would be a big revenue-raiser even if confined to the very rich. This isn’t enough by itself to make it a good idea, but at least Warren’s proposal is fiscally productive. The U.S. already has various wealth taxes that go by other names, but they work badly. Federal taxes on income from capital — in the form of profits, dividends and capital gains — and taxes on inheritance are varieties of wealth tax. Many state and local governments tax houses and other property as well. To Read more...
Soak the rich? Americans say go for it
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Soak the rich? Americans say go for it

The prospect of 70 percent tax rates for multimillionaires and special levies on the super-rich draw howls about creeping socialism and warnings of economic disaster in much of Washington. But polling suggests that when it comes to soaking the rich, the American public is increasingly on board. Read More
Wealth tax better than alternatives
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Wealth tax better than alternatives

Close on the heels of U.S. Rep. Alexandria Ocasio-Cortez’s proposal to tax top income at 70 percent, Sen. Elizabeth Warren has released her own big idea — a tax of 2 percent a year on all wealth above $50 million, rising to 3 percent for those fortunes of more than $1 billion. The proposal, which would affect about 75,000 of the country’s wealthiest people, also comes with a set of measures designed to reduce avoidance and evasion. Read More
Elizabeth Warren Doesn’t Understand Wealth Taxes
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Elizabeth Warren Doesn’t Understand Wealth Taxes

Sen. Elizabeth Warren has proposed a federal wealth tax—2% annually on assets above $50 million and 3% on assets above $1 billion. The response has been predictable. Progressives praise the proposal as necessary to curb the political power of the wealthy; conservatives see it as an attack on success and business stewardship. The real problem with Ms. Warren’s proposal, however, is not that it taxes concentrated wealth, but that it does so hamfistedly.  Read More
Senator Elizabeth Warren wants to tax the US rich more – but how do you do it?
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Senator Elizabeth Warren wants to tax the US rich more – but how do you do it?

In a world where Senator Elizabeth Warren's proposed "Ultra-Millionaire" wealth tax becomes law, rich Americans will have every incentive to try avoiding it. The plan would levy a 3 per cent tax on net wealth above US$1 billion (NZ$1.5 billion), as well as 2 per cent tax on wealth above US$50 million. The plan would quickly begin reducing some of America's largest fortunes by hundreds of millions of dollars. (Nobody whose net worth is less than US$50m would be affected by the tax.) Read More
A very big experiment:’ How Elizabeth Warren would try forcing billionaires to pay her wealth tax
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A very big experiment:’ How Elizabeth Warren would try forcing billionaires to pay her wealth tax

In a world where Sen. Elizabeth Warren’s (D-Mass.) proposed “Ultra-Millionaire” wealth tax becomes law, rich Americans will have every incentive to try avoiding it. The plan would levy a 3 percent tax on net wealth above $1 billion, as well as 2 percent tax on wealth above $50 million. The plan would quickly begin reducing some of America’s largest fortunes by hundreds of millions of dollars. (Nobody whose net worth is less than $50 million would be affected by the tax.) Warren has proposed a series of aggressive new enforcement policies designed to prevent the wealthy from escaping it. She wants to dramatically beef up funding for Internal Revenue Service enforcement. She’s proposing a new requirement that a minimum number of very wealthy taxpayers face an audit annually,...
Soak the rich: U.S. Democratic contenders vie to be the toughest on taxing the wealthy
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Soak the rich: U.S. Democratic contenders vie to be the toughest on taxing the wealthy

WASHINGTON - The last Democrat to win a U.S. presidential election, Barack Obama, ran in 2012 on a platform of raising taxes for top earners to nearly 40 percent. Now a new crop of Democratic presidential hopefuls is signaling that they want to go even further. Massachusetts Sen. Elizabeth Warren is floating a 2 percent tax on all assets of people with a net worth of more than $50 million — a moonshot plan that could face legal challenges for hitting investments, homes and cars, not just income. Vermont Sen. Bernie Sanders is pitching a steeply higher inheritance tax on large estates. To read more
When it comes to higher taxes on the wealthy, listen to the economists – not the billionaires
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When it comes to higher taxes on the wealthy, listen to the economists – not the billionaires

Money doesn’t talk, it swears, sang Bob Dylan. And liberal billionaires in the US are certainly not being polite about the latest policy ideas emanating from America’s Democratic Party. Howard Schultz, the billionaire founder of the Starbucks coffee chain who is considering running for president in 2020, last week condemned universal health care and higher rates of income tax on the super-rich, as proposed by the new Democratic congresswoman Alexandria Ocasio-Cortez, as “un-American”. To Read More
Most—Not All—Advisors Think Warren’s Wealth Tax Would Be a Disaster
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Most—Not All—Advisors Think Warren’s Wealth Tax Would Be a Disaster

Not all advisors work with investors who would be impacted by Sen. Elizabeth Warren’s controversial wealth tax, but most have strong opinions about the impact the proposed tax would have on the U.S. investment markets, wealthy investors and the U.S. economy as a whole. The controversial tax proposal, which is a centerpiece of Warren’s bid to become the Democrat nominee for president in 2020, would levy a 1% tax on those who have $50 million to $1 billion in wealth, rising to 2% for those with $1 billion and above. While Warren has put the revenues her tax would raise in the trillions, pundits are already challenging the constitutionality of the tax as well as the difficulty of valuing assets.   Read More
Why Elizabeth Warren’s Wealth Tax Would Work
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Why Elizabeth Warren’s Wealth Tax Would Work

In 1995, Edward Wolff, an economist at N.Y.U., published a short book called “Top Heavy,” which detailed the increasingly alarming concentration of wealth in the United States, and warned of the threat that it posed to American democracy, as the ultra-rich sought to exercise more political power. At the time, the richest one per cent of families controlled about forty per cent of all household wealth—defined as stocks, bonds, other financial assets, equity in private businesses, trusts, real estate, and bank deposits—while much of the population had virtually no wealth at all once debts and mortgages were taken into account. To address this disparity, Wolff called for the introduction of an annual tax on wealth. Aware that this might be considered a radical idea, he kept his proposed ...