The Congressional Democrats propose a variety of taxes to pay for their $3.5 trillion budget plan. This includes new levies on the rich.
Ron Wyden (D-Ore.), Chairman of the Senate Finance Committee, has proposed taxes on so-called "derivatives", which are financial contracts that are linked to assets and carried interest. These generally receive hedge fund managers or private equity firms.
These measures require a "mark to market" tax. Investors may be subject to levies based on market values each year. This could pave the way for similar levies on capital gain, according a Tax Foundation analysis.
Investors don't have to pay taxes on their gains, nor can they claim a deduction for their losses, until they sell. Investors will be subject to mark-to-market levies every year, even though they still own the asset.
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Wyden stated that the country's richest people who have benefited greatly from the pandemic are not paying their fair share. A spokesperson provided Wyden with a statement. They can defer, delay, defer, and then never pay taxes on billions of gains.
According to CNBC, future mark-to-market tax proposals could aim to stop billionaires delaying taxes for decades or indefinitely passing wealth on to their heirs.
Wyden stated that "no nurse, firefighter, or teacher in America can play these games." They pay their taxes with every paycheck, and they are outraged to read that the richest few are paying so little, despite working hard to make ends work.
He stated, "We must fix this broken system."
