For anyone else who may be wondering, the Washington Post estimates that this would affect ~16,000 households and generate (on the high end) $72 billion annually in additional tax revenue.
I'm all for high taxes for the rich but this particular scheme is fairly unlikely to generate that much additional tax revenue and I think it's even possible that this will reduce tax revenue. Because income in the form of unrealized capital gains is not taxable at all and corporate tax rates are going to be much lower than 70%, it will certainly cause people to shift personal income into one of these forms. Income tax beyond a certain point is almost always going to be regressive because of the fixed costs involved in converting one type of income to another. A much better approach is making taxes relatively flat and spending more progressive - this is basically how it works in Europe.
It seems very unlikely to actually raise much directly. As the article quotes someone saying,
> You’d certainly see some people under that system change their behavior to avoid the higher rate, which could significantly impact how much revenue it generates
Which is the real point. It's intended to do something to rein in out of control executive compensation. Particularly stock compensation which gives execs an incentive to do short term price manipulation.
(Edit: that's what it did the last time the top rate was this high before Reagan cut it. CEO pay was more like 30x ordinary workers, not 300x)
So some CEOs defer cashing out for one year and then it’s back to regular business as they cash out last year’s comp at capital gains rates? It’s basically a no-op.
This sort of talk is just pure envy driven fantasy.
Maybe so, but I do believe if you're paid in stock (not options) you pay taxes immediately, then capital gains is applied to any difference in value when it's sold. I could be wrong, I have no special expertise here.
The disagreement would likely persist even if it was $5M. I haven't heard anyone object to the issue because of its price. The US government spent $4T last year. So yeah, an extra $72B does seem like a drop in the bucket.
Looked at from the deficit, I suppose. Though I'm not persuaded by arguments based on what extra funds could do; there's a lot we could do by just rearranging the already ginormous amount the government collects. It's not going to happen, though.