The US `launched` a plan to tax the super rich

(Dan Tri) – The Democrats’ proposal to tax the richest group of people in America seems to make some billionaires `start` planning to respond.

Over the years, America’s super-rich are said to have used many ways to avoid paying taxes (Illustration: Reuters).

According to SCMP, congressman Ron Wyden, chairman of the Senate Finance Committee, on October 27 announced a proposal for a `billionaire tax`, aiming to impose taxes on about 700 of the richest people in America.

This proposal is aimed at the super-rich with assets of at least $1 billion or income of $100 million for 3 consecutive years.

Congressman Wyden said that while the middle class in the US must pay taxes on their annual salary, the super-rich use a series of strategies to delay tax bills, sometimes indefinitely.

The biggest challenge for Democrats is to find a way to ensure that America’s super-rich actually pay taxes.

Under the new proposal, on tradable assets like stocks, billionaires would still have to pay taxes even if they kept the assets.

The proposal also includes regulations targeting private assets, including art, real estate and private companies that are difficult to value, to prevent billionaires from evading taxes.

Billionaires find ways to respond

However, observers say, billionaires still have the ability to hire consultants, accountants and lawyers who can both legally challenge the tax proposal and come up with ideas to avoid it.

Critics of the proposal say it would be too difficult to enforce and could be ruled unconstitutional by the US Supreme Court.

Steve Rosenthal, a senior fellow at the Tax Policy Center, a Washington think tank, warned that the US government still risks being `overtaken` by billionaires in the proposed scenario.

American billionaires have doubled their net worth over the past five years to more than $5 trillion, including a $1.2 trillion increase over the past 12 months, according to Bloomberg.

According to experts, the super rich seem to have a strong incentive to do everything possible to avoid being taxed.

One way to avoid the `billionaire tax` is to divide assets among family members to ensure that there are many taxpayers with assets below $1 billion – the proposed mandatory tax threshold, according to experts.

Currently, the 10 richest people in America own assets of over 1,400 billion USD.

Elon Musk, currently the richest person in the world with $292 billion, has publicly criticized the billionaire tax proposal.

`Spending is the real problem here. Even if the super-rich are taxed 100%, the government still needs the public to make up the shortfall. It’s basic math,` he said.

However, not all billionaires oppose the tax proposal.