A Progressive System of Mark-to-Market Taxation

34 Pages Posted: 21 Oct 2010 Last revised: 12 Nov 2010

Multiple version iconThere are 2 versions of this paper

Date Written: October 19, 2010


This article proposes a progressive system of mark-to-market taxation.

Under the proposal, all public companies, all private companies with $50 million or more of net assets, and all individuals and married couples with $1.6 million of adjusted gross income or $5 million of publicly traded property - representing the top 0.1 percent of highest-earning and wealthiest individuals - would be required to mark to market their publicly traded property and derivatives.

Mark-to-market gains of corporations would be subject to tax at the current marginal rate of 35%. Mark-to-market losses of corporations would be fully deductible against ordinary income or capital gain. Mark-to-market gains (and qualified dividends) of individuals would be subject to tax at the long-term capital gains rate of 15 percent, and their interest and other ordinary income would remain subject to tax at the ordinary income rate of 35%.

Individuals’ mark-to-market losses would be fully deductible to the extent of prior mark-to-market gains, could then be used to offset capital gains, and then mark-to-market losses could offset 43 percent (15%/35%) of ordinary income or could be carried forward indefinitely.

By a conservative (but back-of-the-envelope) estimate, the proposal could generate between $490 billion and $750 billion of new revenue over a 10-year horizon.

JEL Classification: H20, H21, H22, H23, H24, H25

Suggested Citation

Miller, David S., A Progressive System of Mark-to-Market Taxation (October 19, 2010). Available at SSRN: https://ssrn.com/abstract=1694699 or http://dx.doi.org/10.2139/ssrn.1694699

David S. Miller (Contact Author)

Proskauer Rose LLP ( email )

Eleven Times Square
New York, NY 10036-8299
United States

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