I Have a Lot of Problems With Mitt Romney. His Business Sense Is Not One of Them.

Mitt Romney Blasts Democrat Proposals on Fox News – PJ Media

Say what you will about Sen. Mitt Romney, but when he comes to play, he’s strong and informed– especially on fiscal matters.

He demolished then-President Barack Obama in their first 2012 debate, and Monday night on Fox News, Romney took Democrats’ current economic plans to task.

“Well, first of all, it’s not a good idea to tell billionaires, don’t come to America, don’t start your business here, to tell the Steve Jobs and the Bill Gates and people like that, this isn’t the place to begin your business, go somewhere else. That’s a bad idea,” the Utah Republican explained to Bret Baier. “But, number two, you’re going to tax people, not when they sell something, but just when they own it and the value goes up. And what that means is that people are, these multi-billionaires, are going to look and say, I don’t want to invest in the stock market, because, as that goes up, I’m going to get taxed.”

An even better point, that I had not yet made.

Taxing unrealized capital gains will shut down investment in the stock market. Which will bring economic growth to a grinding halt.

A lot of Democrat plans seem to have that side effect. It’s almost as if it’s intentional.

Everyone Should Slam Them Over This

Elon Musk Slams Democrats Over Extreme Proposal To Tax Unrealized Capital Gains | The Daily Wire

Exactly. Eventually, they run out of other people’s money and then they come for you.

— Elon Musk (@elonmusk) October 26, 2021

Musk is sleazy, arrogant, and probably a little bit crazy. It’s three-quarters of the combination that has made him so wealthy. The fourth part is that he’s incredibly bright.

Taxes on unrealized capital gains are criminally bad. They’re even worse than high corporate taxes, which if you’ve read this blog, you know I can’t stand.

I don’t think this idea is going anywhere. This time. There aren’t enough stupid people in Washington to get this one over the finish line. But there is more stupidity there every year, so it’s only a matter of time.

You CAN’T Do This. Period. Full Stop.

Dems plan billionaires' unrealized gains tax to help fund $2T bill (nypost.com)

No nation on earth has ever had the audacity to attempt to tax unrealized capital gains. Why? Because it’s theft, that’s why. There’s no other word for it.

What are unrealized capital gains? Imagine this scenario.

You buy $1000 worth of stock. The stock skyrockets. A few days later it’s worth $4000. You either aren’t paying attention, you think it’s still going to go a little higher. A few days later the stock is again worth $1000. You didn’t make any money, because you didn’t sell. You didn’t realize the gain.

If the Democrats plan goes through, you will now owe taxes on the $3000 you never saw.  This will literally bankrupt people and businesses.

This may be the dumbest idea Democrats have ever had, and that’s saying something.

The Only Dumber Idea than Corporate Taxes are Wealth Taxes

Well, carbon taxes are up there too, but these are the top two.

History Tells Us That Wealth Taxes Don't Work, by Veronique de Rugy | Creators Syndicate

In a study done for the Center for Freedom and Prosperity, Rice University economists John Diamond and George Zodrow examined the expected impact of Warren's previously proposed wealth tax (a 2% annual tax on wealth over $50 million, rising to 6% for wealth over $1 billion). They found long-run GDP loss of 2.7%, thanks in large part to a 3.7 % decline in the capital stock. Economists Douglas Holtz-Eakin and Gordon Gray of the American Action Forum also found that Warren's wealth tax would cost workers 60 cents of earnings for every dollar of revenue raised, or approximately $1.2 trillion in lost earnings over the first 10 years.

Well, that’s pretty predictable. When you take money away from investors, they don’t invest. When they don’t invest, companies can’t afford to hire or pay more. When companies can’t afford to hire or pay more, employees lose money.

When all of these things happen, you destroy the economy.

But that’s a goal of Democrats anyway.

If you're skeptical of economic predictions, consider that these scenarios have already played out in the real world. A detailed analysis by the Tax Foundation shows that while many Organisation for Economic Co-operation and Development countries have tried a wealth tax, only five of those countries still have one today.

Wealth taxes weren't widely abandoned because these governments suddenly embraced free-market principles. Instead, implementing the tax put reality on a collision course with the same theoretical myths now being spread in the United States. These taxes don't rake in the revenue or solve the supposed problem of inequality. For starters, wealth taxes aren't paid by rich people who reduce their consumption as a consequence. They reduce their investments, which reduces capital formation, which slows productivity and wage growth. In other words, wealth taxes may be originally paid by wealthy folks, but the economic burden falls heavily on workers.

I think I just said that. There’s one other problem too. Will Veronique de Rugy get it too? I bet she will. She’s damn smart.

Previous wealth taxes also triggered capital flight to other countries, which explains the relatively small amount of revenue actually collected. Declining capital stocks then slowed economic growth and depressed overall tax revenues. The Tax Foundation notes, "Among those five OECD countries collecting revenues from net wealth taxes, revenues made up just 1.2 percent of total revenues on average in 2019." And high administrative costs due to a more complex tax made even the little bit of revenue raised unappealing. That's why so many countries gave up.

Yep, there it is.

You either flunk basic math by supporting such a thing, or you are deliberately trying to destroy the economy. There are no other possibilities.