HERE IT IS: Wyden’s Unrealized Capital Gains Tax on Wealthy Americans
Posted on 10/27/2021
U.S. Senator Ron Wyden (Oregon) last night released his 107-page plan. The Democrats Senate proposal would apply to those with more than US$ 1 billion in assets or more than US$ 100 million in adjusted gross income over three consecutive years. The largest part of the tax bill will be upfront. The tax will charge a long-term cap gains rates on all unrealized monies for tradeable investments, which includes stocks, bonds, and yes cryptocurrencies. Payments could be spread out over five years. After the 5-year period, taxpayers would be on liable for annual capital gains taxes on new unrealized income. Unrealized losses could be carried forward as offsets.
Income Test – applicable adjusted gross income of the taxpayer for the taxable year exceeds $100,000,000 ($50,000,000 in the case of a married individual filing separately).
Asset Test – The requirements of this paragraph are met for any taxable year if the aggregate applicable value of all tradable and nontradable covered assets held by the taxpayer as of the close of the taxable year exceeds $1,000,000,000 ($500,000,000 in the case of a married individual filing separately) .
There are deferred interest charges included for certain non-tradeable assets that are to be paid upon sale or transfer.
Wealthy people would likely take out loans to cover the tax payments.
On Sunday and repeatedly in public, U.S. Treasury Secretary Janet Yellen pushed back against defining this as a wealth tax, likely for constitutional reasons. However on the same day, U.S. House Speaker Nancy Pelosi did call it a wealth tax.
Life Insurers to Report
In the bill, one page 100, it says, “IN GENERAL.—Every person who issues a life insurance or annuity contract or who reinsures such a contract shall make an annual return (at such time and in such manner as the Secretary shall prescribe) setting forth—”
