Billionaire Taxes

4 Pages Posted: 11 Feb 2019 Last revised: 27 Mar 2019

See all articles by Michael Simkovic

Michael Simkovic

University of Southern California Gould School of Law; University of Southern California - Marshall School of Business

Date Written: February 28, 2019

Abstract

Targeted ultra-high net worth wealth taxes can fund reductions in taxes on wages. Wealth taxes are harder to avoid than existing capital gains taxes and inheritance taxes, and can be more precisely targeted toward extreme wealth. Exit taxes to prevent capital flight are consistent with business law principles governing partnerships. Valuation disputes can be managed through existing property tax mechanisms and through private law provisions called "shotgun clauses."

Most experts believe that wealth taxes are constitutional. The critical difference between wealth taxes and income taxes, the realization requirement, exists for administrative convenience, not as a constitutional requirement. Constitutional challenges can be discouraged by including in wealth tax legislation a savings clause that would create as a backup an economically equivalent income tax.

See also:

Part II: Taxes Spending and Innovation, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3335386

Part III: After paying ultra-high net worth wealth taxes, how much would billionaires have left to live on?, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3340925

Keywords: wealth tax, income tax, inequality, wages, tax wedge, capital gains, estate tax, inheritance tax

JEL Classification: H2, H24, H22, H23, H25, H26

Suggested Citation

Simkovic, Michael, Billionaire Taxes (February 28, 2019). USC CLASS Research Paper No. CLASS19-7; USC Law Legal Studies Paper No. 19-7. Available at SSRN: https://ssrn.com/abstract=3326615 or http://dx.doi.org/10.2139/ssrn.3326615

Michael Simkovic (Contact Author)

University of Southern California Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

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