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El American’s Idiot of the Week award goes to Senator Ron Wyden (D-OR), who as chairman of the Senate Finance Committee championed the proposal for an unrealized capital gains tax.
This tax would become an effective estate and wealth tax. This is not simply a matter of raising taxes on gains, but also of charging taxes on unrealized gains.
That is, if you have investments and assets that appreciate in value, you will pay for them according to that value, even if you do not sell them at that moment. If they are later devalued and you end up losing money when you sell them, it doesn’t matter, you will have to pay taxes according to their theoretical value every year.
This is an unprecedented tax audacity. Not even in socialists’ wettest dreams anyone dared to do so. Of course, Ron Wyden and much of the Democratic Party chant in chorus that this is something that will only affect the “very wealthy,” those with “$1 billion in wealth or more than $100 million in income for the last three consecutive years.”
Of course. The evil rich. Screw them, it doesn’t affect me.
Ron Wyden wants you to picture those rich people as people who have all that money just sitting there stuffed in their bank account, or in a vault with a 90-foot deep pool full of gold coins and bills, which they swoop and dive into and swim around in daily like Scrooge McDuck. Which, by the way, there would be nothing wrong with either: it’s their money, they’ve earned it.
But when politicians like Ron Wyden talk about taxing the rich, the one who should reach into his wallet is you. Eventually, you’ll end up paying for it. Not just because with taxes you start with the rich and then we will all end up paying taxes on unrealized gains as well, but because with this new tax, the rich will still be rich and it will hardly affect them, but it will affect their investments and their businesses, and that ends up hurting you now.
The reality is that much of that money of the rich is invested, directly or indirectly, in companies that provide society with products or services that we need and demand, either for the final consumption of people, or so that other companies or organizations can carry out their activity and create jobs for everyone.
Of course, there are despicable rich people who have made their fortune illegitimately and competing unfairly with their adversaries in the marketplace, but for Ron Wyden to set himself up as a scourge of the rich and a friend of the poor, with this rhetoric that feeds and takes advantage of the feeling of resentment towards the rich as a block, seems idiotic to us.
If you punish with more taxes those who take the risks of investing to make money, and on top of that threaten them with the possibility of losing it by taxing theoretical unrealized gains, you will kill the very engine of wealth, business, and job creation.
Does Wyden think he is Robin Hood?
It has become popular to say that “Robin Hood stole money from the rich to distribute it to the poor”, when originally the merry outlaw was recovering and returning to the nobles the money from the high taxes collected by the Sheriff of Nottingham for King John Lackland. Politicians like Ron Wyden think they are Robin Hood, when in reality, they are the evil Sheriff of Nottingham.
Ignacio Manuel García Medina, Business Management teacher. Artist and lecturer specialized in Popular Culture for various platforms. Presenter of the program "Pop Libertario" for the Juan de Mariana Institute. Lives in the Canary Islands, Spain // Ignacio M. García Medina es profesor de Gestión de Empresas. Es miembro del Instituto Juan de Mariana y conferenciante especializado en Cultura Popular e ideas de la Libertad.
Social Networks: @ignaciomgm