Democrats find themselves in the desperate situation of scrambling for new ways to pay for President Biden’s social agenda now that Senator Kyrsten Sinema has ruled out all the tax hikes the rest of them support. Their solution involves creating a new tax on billionaire stock holdings.
Under current law, people who make money on stock only pay tax when the stock is sold at a profit. This allows very wealthy people to amass enormous gains on paper that do not have any tax burden — Jeff Bezos pays virtually nothing in taxes because he hasn’t sold his Amazon shares. However, in reality, Bezos is a very rich person who can borrow against the value of his stock holdings and enjoy a lavish lifestyle.
The legal challenge is even more serious. In 1913, the Supreme Court, then controlled by right-wing judicial activists who interpreted the Constitution as forbidding any liberal economic or civil-rights law, struck down an income tax passed by Congress.
I am not qualified to adjudicate this debate. Here’s what I do know. The Supreme Court has a 6-3 Republican majority, and five of those Republicans are extremely conservative. The case against the billionaire stock tax is far more plausible than the constitutional case against Obamacare, which already won the support of all the justices to the right of John Roberts.
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