In part, Senator Joe Biden opposed the proposed wealth tax for billionaires during their primary campaign. This helped President Joe Biden get elected. Elizabeth Warren (D–Mass.) and Bernie Sanders (I–Vt.). Biden now plans to accept the idea in a complete reversal.
This wouldn’t be the first instance of a presidential candidate changing his plans after being elected. It is a shame that Biden has changed his position on this issue. This could undermine Biden’s claims to be a voice for moderation. The possibility of voter cynicism being reinforced by it is also possible. It could also make it more difficult for democracy to function if politicians abandon one of their policy positions once they are elected.
Biden told wealthy donors during the campaign that they shouldn’t expect a tax cut from him. But! He added, “But!”
That promise may not survive the Senate, which is readying what It is the New York Times describes as “a proposal by Senator Ron Wyden, an Oregon Democrat and the Finance Committee chairman, that would raise hundreds of billions of dollars with a wealth tax on just 600 to 700 people — America’s billionaires.” The TimesAccording to reports, “people with assets of $1 billion or income exceeding $100 million for the past three years will be eligible for a new tax system.” Initially, they would have to assess the current value of their tradable assets — like cash, stocks and bonds — and their value when they were purchased, then pay a one-time tax on them.”
The Washington Post reports that “The plan would also set up a system for taxing assets that are not easily tradable, such as real estate,” and that “billionaires would also be able to take deductions for any annual loss in value of those assets.”
There are many constitutional problems that such plans will face.
This tax could not be applied to a very small amount of individuals, so it would have to be banned by the Constitution, Article I against any bill of attainder.
Congress was granted the ability to tax income by 16th Amendment. Wealth taxes are not covered. Therefore, Congress may not have the power to tax wealth. Janet Yellen, the Secretary of Treasury tried to claim that the Biden Wyden Wealth Tax is not a wealth-tax. On Sunday, she stated on CNN that “I would not call it a wealth Tax.” The congressional Democrats were more straightforward than her colleagues. “We will probably have a wealth tax,” House Speaker Nancy Pelosi (D–Calif.) She stated.
Wealth taxes could also be in violation of the Fifth Amendment takings provision, the 14th Amendment due process and equal coverage clauses and Article I prohibiting ex post facto laws. The ex post facto provision has been ruled to apply to criminal law and not tax rates by courts. However, the moral and philosophical point that laws should not be arbitrary or retroactive but rather predictable and prospective is still valid. People took chances and built businesses on a basic understanding of tax law. For non-billionaires, imagine how you’d feel if something the government had told you was tax-exempt—say, your past charitable contributions or mortgage interest, or accumulated gains in your retirement account—was suddenly going to be subject to taxes. It’d be like changing the rules of a baseball game not just mid-season, but mid-plate-appearance.
Biden may be hoping in secret that a future court will declare the tax on billionaires unconstitutional. Biden, contrary to Sanders and Warren, didn’t want to make successful entrepreneurs suffer. However, he does wish to get his spending plans passed by Congress. And if that is the only option, it would appear to be something he would agree to. If a court eventually blocks the tax, Biden would get what’d be for him politically the best of both worlds—the spending, but not the tax increase.
This reminds me of the McCain-Feingold Bipartisan Campaign Reform Act, 2002 that was signed into law by former President George W. Bush. The Supreme Court later declared that substantial portions were unconstitutional. Bush had signed the bill into law while saying, “Certain provisions present serious constitutional concerns….I also have reservations about the constitutionality of the broad ban on issue advertising.”
In the Constitution, there is a constitutional oath that states the President “will, to the best my ability, preserve and protect the Constitution of The United States.” A veto of the billionaires tax would let Biden keep his “no punishment” campaign promise—and would also honor his inauguration day oath.