In yet another flagrant attempt to squeeze more dollars from the American people and into the hands of federal bureaucrats, the Biden Administration has included the misleadingly-named “Billionaires Income Tax” in his 2023 budget proposal.
This proposed tax goes well beyond “taxing the rich” and threatens the livelihood of many of Scottsdale’s small businesses and families. In fact, the billionaire’s minimum income tax isn’t just a billionaires-only tax aimed at several hundred American billionaires. This tax is essentially a government cap on the American Dream.
What makes this new tax especially egregious is that it allows the IRS to tax ordinary income and any increases in value of assets — which could be ownership in stocks, bonds, a family business, a patent or other intellectual property — which currently aren’t taxed until they are sold.
With the proposed capital gains tax rate of 20% (plus the 3.8% net investment income tax), the Biden administration is scrambling to fund a vast array of policy programs and targeting whom they deem to be the wealthiest Americans.
Like other previously proposed bad ideas coming from Washington including Senator Warren and Senator Wyden’s failed versions of the wealth tax, as well as the “double death tax,” which would have taxed unrealized capital gains on small family businesses and generational farms after an owner dies, this “federal asset tax” would immediately impact Scottsdale’s large, medium and even small business owners.
Arizona has over 611,000 small businesses employing 43% of Arizona’s workforce. It has not been easy being a small business owner, whether it is an IT startup, innovative tech firm or mom-and-pop brick and mortar operation.
Over 331,000 jobs were lost because of the Coronavirus epidemic. Many family-operated businesses did not survive because of COVID-related supply chain disruptions and manufacturing plant closures. And now, inflation is at an all-time, with the Consumer Price Index (CPI) jumping 8.5% — the highest since 1981, and the Phoenix area’s CPI is rising even faster at 10.9%.
Proponents are claiming that only those American families worth more than $100 million would be hit. But we know how this has played out before.
According to Turbo Tax, in 1969 when Congress noticed that 155 people were using all the deductions and tax breaks they could to avoid federal income tax, they passed the Alternative Minimum Tax (AMT). Over the next 40 years, the AMT ensnared more and more people until Congress passed legislation so the AMT wouldn’t impact a fifth of all Americans.
Don’t doubt for a moment that legislators will not lower the income threshold in the future to grab even more dollars from you. Over-reaching taxes are the federal government’s way to fund its growing bloat.
Americans and their lifetime investments should not be treated like an unlimited credit card account for the government. Our Senators Kyrsten Sinema and Mark Kelly need to be the balanced voices of reason when it comes to policies like the over-taxation of small businesses.
November is not far off — and raiding the investments of Americans just won’t sit well with the electorate.
Editor’s Note: Suzanne Klapp is a former Scottsdale City Councilwoman.
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