Again, we begin at the beginning. The wisdom is simple. Save America. Kill the bill.
There are lots of rumors about what's in and what's out on both spending and taxes. So far as we know, as Hillary Vaughn reported. There is no deal. My sources, who are smack inside Republican Senate and House leadership tell me we are weeks away and even then no one knows about that.
As Hillary reported this afternoon, House Ways and Means chair, Richard Neal said the so-called wealth tax is out of the bill. Of course, it was knocked out this summer, then it came back, and now it's knocked out again. Good. Very good. But let’s pause a moment. The progressive left Democrats cannot help themselves like a moth drawn to a flame. They cannot help themselves. It is a perfect example of the philosophy of the current Democratic Party that says:
Punish success. Successful people are bad, evil, a scourge to society.
The big government socialist Dems have no interest in jobs, wages, family incomes for typical middle-class blue-collar Americans. They could not care less about economic growth. They're interested only in redistribution, taking from Peter to pay Paul.
Democratic tax policy wants to soak successful individuals and businesses, large and small because they oppose success and simply want to raise money for welfare entitlement purposes. Welfare dependency is their mantra. Welfare dependency without any workfare. This is an old school socialist view.
They want equity. Which we used to call equality. But they want equal results, not just equal opportunity. Like the old Soviet Union and Socialist governments everywhere, these policies would make everyone equally poor. Except for the politically favored nomenklatura. Sound familiar? Leftwing experts ruling over the swamp? Just sayin.
Now back to the billionaire's tax. First of all, the vast majority of the billionaires were not billionaires when they started out in their garages, or wherever. They made a bet. They took a risk. Usually with a small pile of money. And as they exercise their God given talents, they gave us another economic revolution. This led by new technology advances.
Now this stupid bill sponsored by Senator Ron Wyden would actually tax so-called billionaires from the day their assets started appreciating. When they weren't wealthy and their stock was worthless, and so was their business.
That's monumentally stupid. Then there's the issue that year in and year out, the list of richest people changes. Changes a lot. IRS studies of the so-called fortunate 400 show that 71% of the very rich qualify for the list only once. courtesy of the tax foundation. this point regarding the top 400 taxpayers.
If this goofy idea ever went into place, the IRS would be shooting at a moving target. And by the way, it's not just billionaires. It's defined as those who earn more than 100 million in three consecutive years. Beware folks, that number will be coming down, lower and lower.
The IRS believes we're all guilty of hiding information in our bank accounts. The other problem is mark-to-market values often go up and they often come right back down. The wealthiest tend to have their wealth from the sale of capital assets or the sale of private business. As markets fluctuate so would their taxable value under this regime. We used to believe that capital investments turn to taxable income when there is a transaction to sell. Even that is subject to constitutional interpretation over differing definitions of wealth and income.
But finally, I want to remind that these billionaires have created literally tens of millions of jobs. Leading to higher wages and greater family incomes. And in America we used to believe that you could start a business at home around some crazy idea that no one believes in and then you keep at it and it becomes a phenomenal good or service.
Like maybe a small cell phone or computer or medical procedure, or medical equipment, or even therapies and vaccines to save America. Those folks who succeeded way back before they got rich should be praised as the entrepreneurial backbone of the free enterprise American economy. We used to think that way. This is the land of opportunity. One thing my two presidential bosses knew is that government policies should reward success, not punish it. They knew that incentives mattered. And if it pays more to work, invest, innovate, invent etc., they will do so. And if it pays less, they won't. And we used to understand that a good paying job requires a solid healthy business.
But if you penalize the business through higher taxes, it will fail. And so will the workforce. Or if the business reaches out to investors, but we heavily tax capital then they won't take risks, and there won't be a healthy new business, and there won't be a prospering new workforce delivering higher and higher incomes to their families.
Save America. Kill the bill. And that's my riff.
This article is adapted from Larry Kudlow's opening commentary on the October 27, 2021 edition of "Kudlow."