SENATE BILL: Wealth Tax Act (Passed)

[Southern Senator North Carolina Yankee]

A SENATE BILL
To create a fairer Atlasia and maximize government revenue

Be it enacted in both Houses of Congress

Section 1; Title
1. This legislation may be cited as the "Wealth Tax Act".
Section 2; Substance
1. Households of a net worth greater than $50 million shall have a 2% annual tax imposed on their net worth.
2. A 2% annual surcharge shall be imposed on net worth greater than $1 billion.
3. A 1% annual surcharge shall be imposed on net worth greater than $5 billion.
4. A 1% annual surcharge shall be imposed on net worth greater than $10 billion.
5. All household assets shall be included in the calculation of household net worth, regardless of whether those assets are held in Atlasia.
a) Household assets shall include-residences, closely held businesses, assets held in trust, retirement assets, assets held by minors, and personal property with a value of $50,000 or more.
b) 'Closely held business' shall be defined as any sole proprietorship or partnership that any individual in a household legally owns or co-owns.
b) Individuals shall be allowed a closely held business exemption of $10 million from the taxes levied in this act.
6. Illiquid assets shall be defined as-penny stocks or similar stocks, ownership in private firms, fine art, antiques, or any tangible good, partnership shares in hedge funds, alternative investments, long term options, futures, and forward contracts and long term bonds and other debt instruments.
a) 'Long term' shall be defined as a period greater than one fiscal year.
b) Households shall be allowed a total illiliquid asset exemption of $30 million from the taxes levied in this act.
7. Funded by the tax changes in this legislation, the IRS's enforcement budget shall be doubled.
8. Any Atlasian citizen with a net worth of greater than $50 million shall pay a 40% tax on their net worth if they renounce their citizenship.
9. Any Atlasian citizen with a net worth of greater than $1 billion shall pay a 45% tax on their net worth if they renounce their citizenship.
10. Any Atlasian citizen with a net worth of greater than $5 billion shall pay a 50% tax on their net worth if they renounce their citizenship.
11. Nothing in this legislation shall be construed to increase the tax burden on any Atlasian households with a net worth of less than $50 million.
Section 3; Implementation
1. All changes in this legislation shall take effect in the second full fiscal year following its passage into law.

People's Regional Senate

Sponsor: Devout Centrist
Senate Designation: SB19:45

[Southern Senator North Carolina Yankee]

The sponsor has 24 hours to commence advocacy and other members have 48 hours to respond.

[Devout Centrist]

This Act, based on an IRL version, will help Atlasia make great strides in reducing economic inequality. This Wealth Tax focuses on 70,000 households that hold a great deal of this country's wealth. It also contains exemptions for investment, illiquid assets, and collectibles. This bill would reduce the deficit substantially as well.

I urge my colleagues to support this bill and vote Aye when it comes to a final vote.

[Southern Senator North Carolina Yankee]

How much does this generate in revenue?

[Devout Centrist]

How much does this generate in revenue?

The original proposal generates $275 Billion in revenue annually. However, I tweaked some of the rates and added some exemptions. It would be helpful if the GM team could score this.

[Southern Senator North Carolina Yankee]

How much does this generate in revenue?

The original proposal generates $275 Billion in revenue annually. However, I tweaked some of the rates and added some exemptions. It would be helpful if the GM team could score this.

Is there time frame for how long that will take?

[Devout Centrist]

How much does this generate in revenue?

The original proposal generates $275 Billion in revenue annually. However, I tweaked some of the rates and added some exemptions. It would be helpful if the GM team could score this.

Is there time frame for how long that will take?

My guess is, anywhere from a couple days to 2 weeks

[Fmr. Representative Encke]

How much does this generate in revenue?

The original proposal generates $275 Billion in revenue annually. However, I tweaked some of the rates and added some exemptions. It would be helpful if the GM team could score this.

Is there time frame for how long that will take?

My guess is, anywhere from a couple days to 2 weeks

I did a wealth tax estimate for Lincoln so generating some numbers should be easy. However, the big question (and the part that makes this more difficult) is how each new tax affects all of the other taxes and their revenues, especially with so many changes being discussed at once.

Also, has anyone been keeping, like, a spreadsheet or something on new spending/revenue for this session for easy reference? Don't think anyone has asked for an analysis of the Buffett rule one yet but I assume I'll have to cost that one as well.

[Southern Senator North Carolina Yankee]

How much does this generate in revenue?

The original proposal generates $275 Billion in revenue annually. However, I tweaked some of the rates and added some exemptions. It would be helpful if the GM team could score this.

Is there time frame for how long that will take?

My guess is, anywhere from a couple days to 2 weeks

I did a wealth tax estimate for Lincoln so generating some numbers should be easy. However, the big question (and the part that makes this more difficult) is how each new tax affects all of the other taxes and their revenues, especially with so many changes being discussed at once.

Also, has anyone been keeping, like, a spreadsheet or something on new spending/revenue for this session for easy reference? Don't think anyone has asked for an analysis of the Buffett rule one yet but I assume I'll have to cost that one as well.

Could we get a progress report on this?

As to the spreadsheet question, most likely answer is no.

[Devout Centrist]

How much does this generate in revenue?

The original proposal generates $275 Billion in revenue annually. However, I tweaked some of the rates and added some exemptions. It would be helpful if the GM team could score this.

Is there time frame for how long that will take?

My guess is, anywhere from a couple days to 2 weeks

I did a wealth tax estimate for Lincoln so generating some numbers should be easy. However, the big question (and the part that makes this more difficult) is how each new tax affects all of the other taxes and their revenues, especially with so many changes being discussed at once.

Also, has anyone been keeping, like, a spreadsheet or something on new spending/revenue for this session for easy reference? Don't think anyone has asked for an analysis of the Buffett rule one yet but I assume I'll have to cost that one as well.

Could we get a progress report on this?

As to the spreadsheet question, most likely answer is no.

Yes, a report would be much appreciated. I thank Senator Yankee for taking the initiative on this.

[Fmr. Representative Encke]

Federal Wealth Tax Estimate

K, this raises 62.566+/-35 billion dollars.

One annoying thing that delayed costing this:
Pretty much the only good way to estimate the size of the tax base for this comes from manipulating estate tax numbers using estimated mortality rates. However, the IRS data only goes up to 50 million, which makes estimates of the surplus tax revenues difficult and required me to cobble together information from other sources. I included an error column because, due to the extremely narrow tax base, error is quite large.

Also, since this will be implemented in FY2021, this might need tweaking at that time, since I'm using FY2020 estimates as a baseline.

Side note: Lincoln has also added a 3% wealth tax for their budget this year. Therefore, any effects of the additional 2% federal tax will be more pronounced in Lincoln and revenues there may decrease upon implementation.

[Devout Centrist]

Federal Wealth Tax Estimate

How does the mortality assumption come into play?

[Fmr. Representative Encke]

Federal Wealth Tax Estimate

How does the mortality assumption come into play?

The mortality assumption is how the estate tax numbers are transformed into wealth tax numbers. Last year (2018) around 15 U.S. billionaires died out of a total of 680 (2.2%). If you take the effective estate tax rate for the 50 mil+ category (that is, the effective rate taking exemptions and the exclusion amount into account) and multiply it by the mortality rate (here assumed to be 0.02) and a multiplier that brings it in line with the proposed wealth tax, then you can apply this to the current estate tax revenues to estimate how much a wealth tax would bring in. Note that the wealth tax estimate is therefore inversely proportional to the mortality assumption.

I prefer this way of estimation to the 'just take net worth and multiply by the tax rate' method because the estate tax revenues implicitly carry information about tax evasion (note that I did add a multiplier at the end to account for increased enforcement as well as differences between the estate tax and the wealth tax).

[Devout Centrist]

So you're applying the wealth tax to the estate of the deceased? Does the estimate include folks from living households?

[Fmr. Representative Encke]

So you're applying the wealth tax to the estate of the deceased? Does the estimate include folks from living households?

Answer to the first question is no.
Answer to the second question is yes.

That's the entire point of the mortality assumption; the data supplied by the estate tax (on the deceased) is transformed into data for the wealth tax (on the living), with modifications of course.

[Southern Senator North Carolina Yankee]

So the minimum amount raised by this is $29 billion annually correct?

[Devout Centrist]

So the minimum amount raised by this is $29 billion annually correct?

It would appear so

[Fmr. Representative Encke]

So the minimum amount raised by this is $29 billion annually correct?

I mainly included the error to emphasize that it is difficult to produce a 'hard estimate.' Is it possible that revenues are that low? Yes. Do I view that to be a likely outcome? No. Also, there is no currently-implemented RL analogue for this proposal so there's no way to check my work the way that one can check income tax or payroll tax revenues. Estimates for Warren's proposal range from 25 billion to 175 billion (the high estimate is the one endorsed by the campaign, of course) so it's not as if one can find a definitive answer there, either.

[Devout Centrist]

I motion for a final vote

[ON Progressive]

I motion for a final vote

Senators have 24 hours to object.

[Former President tack50]

I object, there is something I want to change

[Devout Centrist]

Since someone has objected to the final vote, I am proposing an amendment:

A SENATE BILL
To create a fairer Atlasia and maximize government revenue

Be it enacted in both Houses of Congress

Section 1; Title
1. This legislation may be cited as the "Wealth Tax Act".
Section 2; Substance
1. Households of a net worth greater than $50 million shall have a 2% annual tax imposed on their net worth.
2. A 2% annual surcharge shall be imposed on net worth greater than $1 billion.
3. A 1% annual surcharge shall be imposed on net worth greater than $5 billion.
4. A 1% annual surcharge shall be imposed on net worth greater than $10 billion.
5. All household assets shall be included in the calculation of household net worth, regardless of whether those assets are held in Atlasia.
a) Household assets shall include-residences, closely held businesses, assets held in trust, retirement assets, assets held by minors, and personal property with a value of $50,000 or more.
b) 'Closely held business' shall be defined as any sole proprietorship or partnership that any individual in a household legally owns or co-owns.
b) Individuals shall be allowed a closely held business exemption of $10 million from the taxes levied in this act.
6. Illiquid assets shall be defined as-penny stocks or similar stocks, ownership in private firms, fine art, antiques, or any tangible good, partnership shares in hedge funds, alternative investments, long term options, futures, and forward contracts and long term bonds and other debt instruments.
a) 'Long term' shall be defined as a period greater than one fiscal year.
b) Households shall be allowed a total illiliquid asset exemption of $30 million from the taxes levied in this act.
7. Funded by the tax changes in this legislation, the IRS's enforcement budget shall be doubled.
8. Any Atlasian citizen with a net worth of greater than $50 million shall pay a 40% tax on their net worth if they renounce their citizenship.
9. Any Atlasian citizen with a net worth of greater than $1 billion shall pay a 45% tax on their net worth if they renounce their citizenship.
10. Any Atlasian citizen with a net worth of greater than $5 billion shall pay a 50% tax on their net worth if they renounce their citizenship.
11. Nothing in this legislation shall be construed to increase the tax burden on any Atlasian households with a net worth of less than $50 million.
Section 3; Implementation
1. All changes in this legislation shall take effect in the second full fiscal year following its passage into law. FY 2020.

[Southern Senator North Carolina Yankee]

A SENATE BILL
To create a fairer Atlasia and maximize government revenue

Be it enacted in both Houses of Congress

Section 1; Title
1. This legislation may be cited as the "Wealth Tax Act".
Section 2; Substance
1. Households of a net worth greater than $50 million shall have a 2% annual tax imposed on their net worth.
2. A 2% annual surcharge shall be imposed on net worth greater than $1 billion.
3. A 1% annual surcharge shall be imposed on net worth greater than $5 billion.
4. A 1% annual surcharge shall be imposed on net worth greater than $10 billion.
5. All household assets shall be included in the calculation of household net worth, regardless of whether those assets are held in Atlasia.
a) Household assets shall include-residences, closely held businesses, assets held in trust, retirement assets, assets held by minors, and personal property with a value of $50,000 or more.
b) 'Closely held business' shall be defined as any sole proprietorship or partnership that any individual in a household legally owns or co-owns.
b) Individuals shall be allowed a closely held business exemption of $10 million from the taxes levied in this act.
6. Illiquid assets shall be defined as-penny stocks or similar stocks, ownership in private firms, fine art, antiques, or any tangible good, partnership shares in hedge funds, alternative investments, long term options, futures, and forward contracts and long term bonds and other debt instruments.
a) 'Long term' shall be defined as a period greater than one fiscal year.
b) Households shall be allowed a total illiliquid asset exemption of $30 million from the taxes levied in this act.
7. Funded by the tax changes in this legislation, the IRS's enforcement budget shall be doubled.
8. Any Atlasian citizen with a net worth of greater than $50 million shall pay a 40% tax on their net worth if they renounce their citizenship.
9. Any Atlasian citizen with a net worth of greater than $1 billion shall pay a 45% tax on their net worth if they renounce their citizenship.
10. Any Atlasian citizen with a net worth of greater than $5 billion shall pay a 50% tax on their net worth if they renounce their citizenship.
11. Nothing in this legislation shall be construed to increase the tax burden on any Atlasian households with a net worth of less than $50 million.
Section 3; Implementation
1. All changes in this legislation shall take effect in the second full fiscal year following its passage into law. FY 2020.

Sponsor Feedback: Origination
Status: Senators have 24 hours to object.

[Southern Senator North Carolina Yankee]

I object, there is something I want to change

What is your desired change?

[Former President tack50]

I object, there is something I want to change

What is your desired change?

Nothing anymore, DC actually did the change I wanted (changing 2021 for 2020)