The Supreme Court is taking up a case over a Washington couple’s $15,000 tax bill that is widely seen as a test of a never-enacted tax on wealth. Arguments are being heard Tuesday.
So the argument is that taxing earning, that are never passed onto the owner of the company, from a foreign business, doing business in a foreign country, owned by a citizen of the USA by the government of the USA is unconstitutional under USA law. The argument is that if the owner never receives the profits then it’s only an asset and shouldn’t be taxed, until the owner of the company receives the profits. Some previous parallels come in with respect to stock and private asset holdings where the value of the asset could increase substantially but no tax would be paid on the asset until it is sold. In some ways this makes sense, your assets are not spendable and their value could change even more before sale. But it puts those without assets at a disadvantage. If I had 1 million in assets I could easily take out a loan for my living expenses and then wait to pay it back when the income tax id face on the sale of my assets is more favorable.
I have no idea how all that works, probably why I’m not a billionaire, but it’s always been my understanding that if you have enough assets you can apply for loans not backed the traditional banks. A recent USA billionaire president was famous for taking a 0% interest private loan to start his business. Again I’m not any kind of tax/money expert so I could be wrong.
So the argument is that taxing earning, that are never passed onto the owner of the company, from a foreign business, doing business in a foreign country, owned by a citizen of the USA by the government of the USA is unconstitutional under USA law. The argument is that if the owner never receives the profits then it’s only an asset and shouldn’t be taxed, until the owner of the company receives the profits. Some previous parallels come in with respect to stock and private asset holdings where the value of the asset could increase substantially but no tax would be paid on the asset until it is sold. In some ways this makes sense, your assets are not spendable and their value could change even more before sale. But it puts those without assets at a disadvantage. If I had 1 million in assets I could easily take out a loan for my living expenses and then wait to pay it back when the income tax id face on the sale of my assets is more favorable.
My house isn’t spendable or even easily liquidated, yet my property tax keeps going up. Not arguing, just throwing that into perspective.
I wonder about financial regulations that say assets that haven’t been taxed can’t be used for asset valuation for loans, etc?
And if you have an asset valued for those purposes then possibly taxed on some ratio of that valuation.
An oversimplification I’m sure but I suspect it’s been considered or is a bad idea and am curious to hear it.
I have no idea how all that works, probably why I’m not a billionaire, but it’s always been my understanding that if you have enough assets you can apply for loans not backed the traditional banks. A recent USA billionaire president was famous for taking a 0% interest private loan to start his business. Again I’m not any kind of tax/money expert so I could be wrong.