Senator Mitt Romney, Republican of Utah an another one of the chamber’s wealthiest, said the billionaires’ levy was a “very bad idea,” because it would distort the behavior of the super wealthy, who would flee stocks, bonds and other liquid assets to hide their money in real estate, diamonds, paintings and other items harder to value.
“People are rational beings,” he said. “They’d move away from tradable assets, and then go to untradeable assets. And that means that you’re going to have a depression on things like venture capital, private equity, in the stock market and people’s 401(k)s.”
The new direction that Democrats are heading goes beyond wealth taxation. To cobble together $2 trillion in revenue over 10 years without rate increases, Democrats are looking at other dramatic changes. They would tighten the rules around business partnerships that have allowed rich companies and executives to shield profits and income from taxation. They would limit access to low tax rates created by the 2017 Trump tax cut for so-called pass-through businesses that pay taxes through the personal income tax system, not the corporate tax code.
Where the Budget Bill Stands in Congress
And they would tax the value of stocks that companies buy back from the market to raise their share prices, a proposal championed by Senator Sherrod Brown, Democrat of Ohio and the Senate’s biggest union champion.
None of those measures were approved by the House Ways and Means Committee or included in the House’s version of the social policy bill. The tax-writing committee’s chairman, Richard E. Neal of Massachusetts, only drafted — or “marked up” — more conventional measures that would hit high earners but leave the wealth of the richest Americans untouched.
“We decided that the most efficient way to accomplish our policy goals was to address the issue of rate increases, because they were not only clear, but they weren’t punitive,” Mr. Neal said, echoing criticism of some of the Senate measures voiced by another reluctant Democrat, Senator Joe Manchin III of West Virginia.
Mr. Neal said Thursday he was “not necessarily philosophically against” Mr. Wyden’s wealth tax, “but it hasn’t been marked up, and there’s been no vetting of it, and I think that it’s a bit of a challenge. That’s for sure.”