Brian Galle (Georgetown; Google Scholar) presents How to Tax the Rich: Options for 2025 and Beyond at Emory today as part of its Faculty Colloquium Series:
How should we pay for the future? This monograph describes and compares major proposals to reform federal individual income and transfer (that is, estate and gift) taxes. The Biden administration and senior Senate Democrats have outlined plans for a “minimum income tax” on multi-millionaires in which very wealthy households (generally those worth over $100 million) would be taxed on the value of appreciated but unsold property. The administration’s proposal was dubbed the Billionaire Minimum Income Tax, or BMIT. Yet some other Senators, and advocates outside government, have pointed to possible constitutional limits on that proposal, as well as offering critiques of its economic and political merits. …
To briefly preview my findings, my central argument is that instead of any of these options, policy makers in search of revenue should adjust the capital gains tax so that its rate increases the longer the taxpayer holds an asset, which I call the fair share tax (FAST). For reasons I describe more below, the FAST in fact can be designed so that it is exactly economically equivalent to the other options, such as a BMIT, eliminating basis step-up at death, or deemed sales triggered by borrowing. But the FAST is much easier to implement, because it doesn’t suffer from the traditional challenges tax systems have struggled with when attempting to impose tax at times other than at sale. And there is little doubt that the FAST, which is just a choice of the tax rate, would be constitutional.
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