Page 13 - Investment Advisor April 2021

people should pay more, but it would who renounces their citizenship in and penalties for underpayment.
be almost impossible to put into place order to escape paying their fair share In early March, Warren was named
and enforce and to do it each year. in taxes; chairwoman of two Senate sub-
There is just no way this kind of tax can • New tools to determine the value of committees — the Senate Banking
be practically assessed.” hard-to-value assets, enabling the IRS to Committee’s Subcommittee on
First, Slott continued, “this is a tax tighten and expand upon existing valua- Economic Policy and the Senate
based on net worth, which is essentially tion rules; and Finance Committee Subcommittee
the same process as prepar- on Fiscal Responsibility and
ing an estate tax return after “The idea of a wealth tax ‘may Economic Growth.
death. But under this proposal sound fair to those who are not She joined the Senate
the tax would be assessed each Finance Committee in early
year. This would essentially be anywhere near that wealthy … February.
an estate tax every year for this As chair of two subcom-
group. That’s insane.” but it would be almost impossible mittees, Warren said she’d
Estates of these ultra- to put into place and enforce and “continue to push for racial
wealthy individuals “often take and economic justice and
years to sort out to determine to do it each year. There is just lasting economic security for
the actual value for estate tax no way this kind of tax can be families,” and also “use these
purposes. These estates are committees to hold big corpo-
loaded with complex busi- practically assessed.’” rations and their executives
ness interests, stock and other accountable and to strength-
property held both in the U.S. —Ed Slott en our banking, securities,
and around the world and in and tax laws — and make sure
trusts and other entities that may be dif- • Systematic third-party reporting they are enforced.”
ficult to locate (and they would sudden- that builds on existing tax information
ly be even more difficult to locate — or exchange agreements adopted after the Washington Bureau Chief Melanie Waddell can
disappear altogether — if this was ever Foreign Account Tax Compliance Act, be reached at [email protected].
enacted.),” Slott added.
The U.S. “would probably lose billions
in tax revenue from the tax shenanigans Bipartisan Bill Bans Stock Ownership for Members
that would follow a tax like the one pro- of Congress
posed,” he added. A bipartisan bill that would ban members of Congress from trading individual
Also, “remember that these individu- stocks has been introduced in the House of Representatives and the Senate.
als have the means to make sure they The Ban Conflicted Trading Act would bar members of Congress, along with
will never pay these taxes,” Slott added. their senior staffers, from buying or selling individual stocks and other invest-
ments and from serving on any corporate boards while in office.
ADDITIONAL PROVISIONS New members would be allowed to sell individual holdings within six months of
The Ultra-Millionaire Tax, according to being elected, and sitting members of Congress would be allowed to sell individu-
the lawmakers, also would provide for: al holdings within six months after enactment of the bill. Congressional members
• A $100 billion investment to rebuild also would have the option of retaining investments while in office if those invest-
and strengthen the IRS, ensuring the ments were transferred to a blind trust.
agency has the resources to hire and When the bill was introduced on March 3, Sen. Jeff Merkley, D-Ore., a co-
train additional personnel, modernize sponsor of the Senate bill, along with Sens. Sherrod Brown, D-Ohio, and Raphael
IT systems, and implement the new
Stefani Reynolds/Bloomberg ment requirements in the bill. deeply corrupt.
Warnock, D-Ga., noted in a statement the “need to end the era in which mem-
asset valuation, reporting and enforce-
bers of Congress buy and sell individual stocks for personal gain. This practice is
• A 30% minimum audit rate
“First, it biases the viewpoint of members when working on legislation related
for taxpayers subject to the Ultra-
to a stock they own. Second, members trade on information they hear that
Millionaire Tax;
the general public doesn’t. And that’s just wrong,” according to the statement.
• A 40% “exit tax” on the net worth
—Bernice Napach
above $50 million of any U.S. citizen
APRIL 2021 INVESTMENT ADVISOR 11