Mar 22, 2024 2 min read

I’m happy for George Dawes that, according to his March 15 letter, that he’s in a position to fear the unrealized capital gains tax (the so-called “billionaire’s tax”). Per President Biden’s proposed budget, the changes to the tax only affect gains over $5 million for individuals ($10 million for married tax filers) at death or taxed at around 20% for taxpayers with over $100 million in total wealth. Short of hitting the Powerball, I won’t have to worry about either change.

In 2022, Americans for Tax Fairness estimated that people with over $100 million in wealth held $8.5 trillion in unrealized gains collectively. Under the current structure, that $8.5 trillion may never be taxed. The wealthy don’t need to sell off the assets (or realize the gains, if you will) to benefit. They can use these unrealized gains as collateral to get low-cost loans and increase their wealth. And, once those gains are inherited after death, they completely disappear for tax purposes.

Dawes would rather take away a successful school lunch program that benefits millions of children than take away an $8.5 trillion tax shelter from the wealthy. That is giving up hundreds of billions of dollars of tax revenue that could help Social Security or pay down debt.

Brian Lemley

Washington