Top Finance Dem to propose annually taxing wealthy people’s investment gains
Senate Finance Committee ranking member Ron Wyden (D-Ore.) on Tuesday said that he will put forth a proposal to ensure that wealthy individuals are paying their “fair share” of taxes, amid a debate among Democrats about how best to levy taxes on the rich.
Wyden announced that he will put forward a white paper that calls for taxing the capital gains of wealthy individuals’ investments annually, as opposed to when the investments are sold under current law. Such an approach is known as “mark-to-market.”
Wyden would also tax the capital gains at the same rates as other income, while capital gains are currently taxed at lower rates than ordinary income.
“Everyone needs to pay their fair share and the best approach to achieving that goal is a mark-to-market system that would require the wealthy to pay taxes on their gains every year at the same rates all other income is taxed,” Wyden said in a statement. “This eliminates serious loopholes that allow some to pay a lower rate than wage earners, to delay their taxes indefinitely, and in some cases, to avoid paying tax at all.”
“Just increasing the top tax rates leaves loopholes in place that savvy accountants and lawyers exploit,” he added. “In contrast, taxing the annual gains generated by wealth closes a host of loopholes while raising the sort of revenue needed to keep Social Security and Medicare secure for years to come.”
Wyden’s announcement comes as many Democrats in the presidential race have released proposals to boost taxes on the wealthy in an effort to reduce wealth inequality and raise revenue to pay for spending priorities. Sen. Elizabeth Warren (D-Mass.) has proposed a wealth tax, while several candidates, including Sen. Bernie Sanders (I-Vt.), have proposed expanding the estate tax.
Wyden is not running for president. However, if Democrats win the 2020 presidential election and take back control of the Senate, Wyden would likely become chairman of the Finance Committee and would play a key role in crafting tax legislation.