Wealth Tax Has Little Chance of Enactment
Author: Greg Valliere
August 29, 2024
ANXIETY IS RISING among wealthy Americans that massive new taxes — including a “wealth tax” — are likely in a Kamala Harris administration. But that’s not the consensus on Capitol Hill, where there simply aren’t enough votes for big new taxes.
LIKE EVERYTHING IN WASHINGTON, this issue depends on who has the votes. Proponents of huge new taxes on the wealthy and profitable corporations would need Harris to win, the Democrats to take both houses, and a likely Constitutional challenge on a wealth tax to succeed.
HERE’S THE KEY FACTOR: Chances of steep new taxes are very slim for one major reason — the Senate is likely to flip back to the Republicans, who are strongly opposed to major new taxes. We think there’s a 75% chance that the GOP will take the Senate, even if Harris wins the presidency.
THE MOST CONTROVERSIAL TAX PROPOSAL is an idea backed by Sen. Elizabeth Warren and other liberals which would impose a “wealth tax” on unrealized capital gains. This would be a nightmare to enforce and would send the class warfare debate into the stratosphere. It has no chance of enactment because there aren’t the necessary 60 votes in the Senate.
DEMOCRATS HAVE A HUGE LAUNDRY LIST OF NEW SPENDING proposals, and some could win at least partial enactment in a budget “reconciliation” bill. But some of the Donald Trump 2017 tax cuts may win enactment in horse trading next year, with only modest Harris tax hikes winning passage.
IRONICALLY, both Trump and Harris might need to continue stiff tariffs on countries like China because they need the revenue. But the U.S. budget deficit, now close to $2 trillion annually, could still surge higher.
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MUST SEE TV TONIGHT: Harris and VP running mate Tim Walz will finally sit down for a formal interview, which will be on CNN at 9 p.m. this evening. We can think of a couple dozen questions that could be asked but our main one is whether this will be it — will there be no other press conferences between now and November 5?
HARRIS AND WALZ spent time earlier this week practicing their answers; are they ready for prime time? The pressure is on them to avoid any gaffes. If they do, Harris will reach the September 10 debate with the lead. High stakes tonight: if she mis-speaks, the press and Trump will pounce, and this race could be tied again.
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