Sen. Elizabeth Warren's plans to hike federal tax rates could leave some of the nation's wealthiest people paying more than 100%, if a combination of payments the Democratic presidential candidate wants are approved should she end up in the White House.
The Massachusetts senator is proposing a cocktail of tax increases that include returning the top income tax rate to 39.6%, from 37%; imposing a new 14.8% Social Security tax; adding an annual 6% tax on accumulated wealth; and requiring rich investors to pay capital-gains taxes at rates equal to that paid for other income, even if their assets aren't sold, reports The Wall Street Journal.
For example, if a billionaire earns a 6% return on a $1,000 investment, or $60, he could owe 58.2%, or $35 in federal tax, along with a 6% wealth tax of at least $60, meaning the combined tax rate could be as high as $95 for $60, or a combined tax rate of 158%.
"It's just a continuing laundry list of proposals that just keep heaping on," said Robert Gordon of Twenty-First Securities Corp., an investment advisory firm.
While the rates would vary according to circumstances, the tax rates of more than 100% on investment income would likely be typical, especially when it comes to billionaires, notes the Journal.
Warren's tax hikes are aimed at paying for expansion to healthcare, child care, housing, and more, and are aimed at the nation's wealthiest, in hopes of bringing the United States in line with other industrialized nations, which typically charge higher retail sales taxes to finance their social programs.
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