March 16, 2023
Here’s why Biden’s ‘billionaire tax’ plan is almost certainly unconstitutional
by Brad Polumbo
WashingtonExaminer.com
Critics have widely panned President Joe Biden’s latest budget proposal for its reckless spending and massive tax hikes. But one criticism that’s flown under the radar is that Biden’s budget also includes one policy that’s blatantly unconstitutional.
The president is proposing a “billionaire minimum tax” of 25% that would apply to “appreciated assets.” That’s essentially a tax on unrealized capital gains. What does that mean? Well, right now, if you own a stock that increases in value, you are only taxed on that increase in value if and when you sell the stock. But by taxing unrealized gains, Biden’s billionaire tax would tax rich people on their hypothetical increases in wealth even though they haven’t actually sold the stocks and cashed in on them yet.
That’s deeply flawed as a matter of policy. But more fundamentally, it’s almost certainly illegal under the Constitution.
Why? Well, as economic historian Phil Magness explains for the American Institute for Economic Research, the Constitution does give Congress the power to levy taxes, but direct taxes must be apportioned among the states relative to population. (This proposal does not do so.)
That’s why the income tax was originally struck down by the Supreme Court and required a constitutional amendment before it could eventually become law. Yet while that amendment, the 16th Amendment, carved out an exception for an income tax, it did not remove the rules on taxes overall, so they still apply for direct taxes other than the income tax.
And an unrealized capital gains tax is, by definition, not an income tax. It’s specifically designed to tax an asset that hasn’t yet become income. So it’s flatly unconstitutional.
“Much like the contrived economic arguments behind the wealth tax, its legal arguments are a result of politically motivated reasoning to bring about a new tax system that the Constitution prohibits,” Magness concludes.
Whether you support increased taxes on the rich or not, we should all, at bare minimum, demand that our elected leaders follow the Constitution when crafting policy. You can’t justify looking the other way when leaders from your side bend the rules just because you like the outcome. Not only are such mental gymnastics unprincipled and immoral. They're incredibly short-sighted; your team won’t be in power forever. You can’t support Biden trampling over the Constitution’s boundaries to tax billionaires unless you’re also OK with the next Republican politician trampling them to pursue his or her agenda.
Such reckless disregard for the Constitution is, unfortunately, becoming par for the course with this administration. Biden’s attempt to “cancel” $10,000-$20,000 in student loan debt after Congress refused to do so is similarly beyond the bounds of his proper constitutional authority, so much so that even members of his own party, such as House Speaker Nancy Pelosi (D-CA), have long admitted it.
That’s not all: Biden also had multiple COVID-19 restrictions, such as his vaccine mandate and “eviction moratorium,” struck down by the courts as illegal abuses of power.
All this from the president who, as a candidate, promised to restore “normalcy” and put “the adults back in charge” after the admittedly chaotic Trump administration. So much for that, I guess?
Biden has repeatedly decided that pursuing his agenda is more important than following the Constitution he swore to uphold. That’s not something anyone, even Americans who support the president’s agenda on its merits, should stand for.
http://www.washingtonexaminer.com/restoring-america/faith-freedom-self-reliance/heres-why-bidens-billionaire-tax-plan-is-almost-certainly-unconstitutional
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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