The July 22 editorial “Here’s the smart way to tax the rich” was smart in more than one way. The editorial’s strategy involved raising top income tax rates, raising capital gains taxes to match income tax rates and increasing taxes on those who inherit wealth. These measures could raise a lot of revenue while avoiding the administrative and legal entanglements of taxing the property of the very wealthy each year.
This tax strategy also displays discretion in that it wouldn’t have much of an effect on the many billionaires of middle age. They usually take relatively little salary and pay capital gains taxes only when they sell assets. They would sidestep much of the impact. Their heirs could lose billions if the estate tax were changed. Higher “death taxes” would be a more immediate concern for older billionaires. Heirs’ estate planners would likely be busy. Beginning to tax the property of the super wealthy, as Sen. Elizabeth Warren (D-Mass.) and Sen. Bernie Sanders (I-Vt.) propose, would affect billionaires now. It would also entail the Internal Revenue Service having to assess the value of their holdings while they are still alive. It’s smart politics to push financial pain into the afterlife.
Karl Polzer, Falls Church