A Comprehensive Mark-to-Market Tax for the 0.1% Wealthiest and Highest-Earning Taxpayers

30 Pages Posted: 5 Jan 2016 Last revised: 21 Jan 2016

Date Written: January 4, 2016


This essay proposes a comprehensive mark-to-market tax for the 0.1% wealthiest and highest-earning taxpayers. Publicly-traded securities would be subject to an annual mark-to-market tax. Nontraded assets would be subject to a “deemed mark-to-market” tax: They would not be subject to tax until sale or other disposition (including gift, donation, or death), but at that time, the taxpayer would be taxed at an amount that would leave the taxpayer with the value he or she would have had if the asset appreciated constantly over its holding period, had been subject annually to a mark-to-market tax, and the taxpayer had sold a portion of the asset each year to pay the tax. Taxpayers would be permitted to annually mark their nontraded assets to market, and deposit an amount of tax based on that valuation. This deposit would accrue at the after-tax yield of the asset for purposes of a credit against the tax due upon a sale. Thus, a taxpayer that reports gain and deposits tax each year based on the ultimate annual yield of an asset would not owe any additional tax with respect to that asset at maturity. Losses would remain on a realization basis, but losses would be deemed to have accrued over the taxpayer’s holding period based on the asset’s yield, could be used to offset deemed gain, and could be carried forward indefinitely.

Although a revenue estimate is inherently speculative, a comprehensive mark-to-market tax at current capital gains rates could raise nearly a trillion dollars of new revenue over the next ten years; at ordinary income rates, over $1.6 trillion dollars.

Keywords: mark-to-market tax, yield-based tax

JEL Classification: H2, H24

Suggested Citation

Miller, David S., A Comprehensive Mark-to-Market Tax for the 0.1% Wealthiest and Highest-Earning Taxpayers (January 4, 2016). Available at SSRN: https://ssrn.com/abstract=2710738 or http://dx.doi.org/10.2139/ssrn.2710738

David S. Miller (Contact Author)

Proskauer Rose LLP ( email )

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

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