The Build Back Better plan should incorporate a better tax plan than the one currently proposed. It should:
- Increase the progressive income tax rates for all higher-income individuals;
- Increase the rate for capital gains tax;
- Change the estate tax laws to eliminate the stepped-up basis provision which allows wealthy families to avoid capital gains tax;
- Eliminate the carried interest tax break for hedge fund executives and other very wealthy individuals.
All of these tax proposals were listed by former Democratic Secretary of the Treasury Larry Summers on the Bloomberg Wall Street Week television program on Friday night October 29. These are all tax ideas that have been discussed for years. There are tons of studies about how they would work, how much federal income they would produce, etc. The enormous reconstruction of the American economy envisioned by the Build Back Better plan would be an ideal time to pass at least a few of these well-studied tax proposals. The current idea of a “billionaires tax” taking assets from extremely wealthy individuals, rather than taxing their income, is untested, unstudied, and perhaps unconstitutional.
The following is a link to the Larry Summers interview: