Don’t tell Americans they’re going to be taxed on wealth. They would undoubtedly pull out their guns to defend their plot of land Inspector Harry’s way. Like Janet Yellen, the Minister of the Economy, prefer to announce that ” exceptionally rich people “, Without doubt the 1,000 largest fortunes in the United States, will spit in the pool. It will go better, everyone knows that we are talking about people who are doing very well and whose fortune is so important that it compares to that of the rest of the inhabitants of the country as a whole, and sometimes even surpasses that of an entire country.
.@SecYellen on the proposed tax which would pay for the Build Back Better act: “It’s not a wealth tax, but a tax on unrealized capital gains of exceptionally wealthy individuals.” pic.twitter.com/XGsQC3GgIU
– The Hill (@thehill) October 24, 2021
$ 1,000 billion in unrealized capital gains
It is now official. After much procrastination, of which Marianne has reported, the Democrats have decided to encapsulate in their draft budget 2022 a new device, as announced on CNN the Democrat Nancy Pelosi, the president of the House of Representatives in Washington. The idea can be summed up in a few words: tax so-called “latent” capital gains. In other words, tax the earnings not yet cashed or “unrealized” as the Americans say. A huge nest egg held by individuals like Warren Buffett or Jeff Bezos, the boss of Amazon, who would finally find their place among the big tax contributors. According to Goldman Sachs, the richest households now hold around $ 1 trillion in unrealized capital gains. This equates to 3% of the total US market cap. Assets held by the top 400 Americans represent the equivalent of 18% of gross domestic product, up from half (9%) in 2010.
A windfall that is used every day by billionaires to consume, invest, but which is never taxed on the pretext that it does not exist until it is actually cashed. But the argument is cut short in a world where heritage has taken precedence. Like the paradox positing that the effects of an illusion are not an illusion, we cannot at the same time say to taxes that ” this money does not exist until the winnings are cashed out »- this is the supposed illusion – and at the same time fully benefiting from these capital gains, by monetizing them thanks to financial techniques – these are the real effects of the supposed illusion.
Economists, foremost among them Emmanuel Saez and Gabriel Zucman, two Frenchmen who whisper in the ears of Democrats, have developed a tax on these latent capital gains, taken up today by the Democrats. Have billionaires been caught off guard in their lobbying by this proposal, which was still recently considered unlikely? Still, even the Democratic Senator Kyrsten Sinema who distinguished herself in her fight against the simple increase in the corporate tax rate from 21% to 26.5%, and that of the personal tax rate from 37% to 39.6%, did not flinch.
More than 50% chance of being adopted
According to our information, American Democrats now estimate that the probability of adopting the capital gains tax has risen to more than 50%.
Several other provisions are still the subject of intense negotiations. Among them are those covering climate policies, paid family leave, the extension of Medicare – the embryo of US version of Social Security – to reimbursements for dental, hearing and visual expenses, and allowing Medicare to negotiate the prices of drugs. issued on prescription.
One thing is certain: while France has just abandoned its wealth tax in 2017 for a rikiki system focused on real estate wealth, the United States, which were forerunners in this general reduction in taxes, have come back. The luminous modernity evoked by Emmanuel Macron in 2017 to erase the ISF turns to cold light. That resulting from the tail of the comet of the academic economic debate at work across the Atlantic. If such a capital gains tax was voted in France tomorrow, Bernard Arnault, our super ultra-rich Frenchman, whose fortune increased by 110 billion last year, should write a huge nine-figure check. Probably a thousand times more than its ISF bill of 2,243,231 euros in 2016.
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