The introduction of a progressive tax on the super-rich has long been the subject of debate popular with many American Democrats, but such a policy would be unthinkable under a Republican administration with a shattered Congress.

Now that the Democratic Party has once again taken control of both the White House and Capitol Hill, the initiative is officially on the table: On March 1, a group of Democratic lawmakers led by Senator Elizabeth Warren introduced legislation proposing an annual home tax. It is entrusted with more than $ 50 million, including the value of assets such as real estate and stocks.

With new bridges emerging between traditional capital and the digital asset space emerging almost daily, wealthy individuals can more easily than ever convert value into cryptocurrency. Would a potential wealth tax, if required by law, affect their willingness to do so?

Warren Plan
Senator Warren’s bill, designated by the Super Millionaire Tax Act, proposes a 2% annual tax on any household’s net worth ranging from $ 50 to $ 1 billion and a 3% tax for those in excess of $ 1 billion. The developers claim that this burden will fall on the shoulders of the 100,000 wealthiest families in the country, or above 0.05% of the wealth distribution.

Lawmakers say the initiative could generate at least $ 3 trillion in federal revenue over 10 years – a pool of resources that could be directed to support underfunded areas such as education, childcare and infrastructure.

A proposed bill must be approved by the US Senate before it becomes law. Despite the fact that Democrats and Republicans currently have a 50-50 ratio equal, and Democratic Vice President Kamala Harris is crucial to the vote, most bills still require at least 60 votes to pass. As Bloomberg noted, Democrats hope to add at least some elements of the tax to the proposed budget, which will be agreed upon later this year.

The criticisms abound
Not surprisingly, this initiative received immediate abuse from right-wing and center-right political forces, as well as the big business community. A few weeks after the proposal was published, the Wall Street Journal ran several articles arguing that the wealth tax would do more harm than good.

It has been argued that the wealth tax of US millionaires and billionaires will affect the ownership structure in the US stock market: Since large US investors will have to sell their more liquid assets at a reduced rate, so will their colleagues in tax-exempt jurisdictions. Happy. Buy. Another argued that capital flight from the stock market as a result of taxing the super-rich would reduce the value of all savings.

Billionaire Leon Cuperman told CNBC that while he thinks the rich should pay more taxes, Warren’s policy formation is “not profitable.” He added, “If the wealth tax takes effect, go out and buy yourself some gold because people will rush to find ways to conceal their wealth.”

Wait, can this gold be digital?

Nowhere to hide
Cooperman’s joke about using gold to hide his net worth is of course allegorical and refers to the types of assets that may be less apparent to the government than assets deposited in bank and brokerage accounts. As for gold itself, the IRS treats precious metals as holdings subject to long-term capital gains tax. Cryptocurrencies certainly do not belong to any of these categories, as they are not holdings (unless they are indispensable tokens) and are no less conspicuous.

If the goal is literally to hide wealth, then resorting to a store of value that is automatically tracked in an open, unchanged ledger doesn’t seem like a good idea. Maria Stankevich, Business Development Director at the Exmo UK Cryptocurrency Exchange, commented to Cointelegraph: “Today, the collective accreditation of BTC is closely related not to shadow money, but to transparent financial asset placement.” Tim Bion, OKCoin PR Specialist added:

“Taxing the super-rich has little or no effect on the spread of digital assets, especially Bitcoin, among all Americans and non-Americans. , Given that Bitcoin leaves a permanent digital footprint.

Source: CoinTelegraph