Politics

Billionaires tax faces constitutional, political hurdles – NBC News

Published

3 years ago

October 27, 2021

WASHINGTON — Democrats’ plan to tax billionaires excites the party’s base. It could be attractive to Sen. Kyrsten Sinema, D-Ariz. And it might be unconstitutional.

Party leaders have been scrambling to find alternative ways to pay for part of the trillion-dollar-plus “Build Back Better” bill because Sinema has ruled out raising income tax rates on high-end earners and corporations.

A proposal under development is a tax on the paper investment gains of the ultra-wealthy. The idea is to capture revenue from billionaires whose assets — mostly stocks and real property — appreciate in value by $100 million each year without being taxed. Under current law, those gains aren’t “realized” and taxed until the underlying assets are sold.

Oct. 26, 202108:25

An ally of Biden’s, Rep. Brendan Boyle, D-Pa., a member of the tax-writing Ways and Means Committee, has worked on a version of the wealth tax with Sen. Elizabeth Warren, D-Mass. He said in an interview Tuesday that it is easy for the government to tax all of the earned income of workers, while the country’s wealthiest investors can simply earn value by holding on to untaxed investments.

“That ends up being very unfair,” he said, adding that he is confident that the plan would survive constitutional muster.

Tax law experts disagree about whether such a provision would be consistent with the Constitution, but Daniel Hemel, a University of Chicago Law School professor, said Democrats would be taking their chances with a conservative Supreme Court.

“This approach makes the Democrats’ plan for taxing the wealthy contingent upon Brett Kavanaugh, and there are lots of constitutionally uncomplicated ways to tax the very rich,” Hemel said. “But it seems like Democrats are coalescing around one of the approaches for which there are genuine constitutional doubts.”

Because the policy hasn’t yet been agreed to — much less written into legislative text — it’s impossible to know exactly how it will be worded. House Ways and Means Committee Chairman Richard Neal, D-Mass., hasn’t yet seen the text of the proposal, according to Punchbowl News.

The question for tax writers and party leaders is whether they can thread both the political and the constitutional needles in drafting the details.

Clear majorities of Americans favor taxing the rich more. In a Morning Consult/Politico poll last month, 68 percent of registered voters said they support raising taxes on the wealthiest people. But few if any independent surveys delve into the question of taxing the unrealized gains of billionaires.

Still, not every Democrat in Congress is sold on the latest approach yet.

“It’s new, so implementation becomes an issue,” said Sen. Jon Tester, D-Mont., who added that he hasn’t passed judgment one way or the other. “I’ve really got to study it.”

Senate Finance Committee Chairman Ron Wyden, D-Ore., said he is confident the provision would survive legal challenges. As proof, he cited lower court rulings in which the taxation of unrealized gains from futures contracts “has always been upheld.”

Legal scholars say that even if courts ruled in favor of taxing unrealized gains at their increased values — known as a “mark to market” assessment of value — it’s unclear how they would approach the constitutionality of a tax conditioned on the wealth of the taxpayer rather than on his or her income.

“There are plausible arguments on both sides,” said Andrew Hayashi, a professor who is the director of the University of Virginia’s Center for Tax Law.

When the Constitution was ratified, it required that “direct taxes” be apportioned among the states “according to their respective numbers,” meaning each state would have to cough up an amount proportional to its population. The 16th Amendment created an exemption that allows the federal government to collect income taxes.

The basic questions for the courts are whether a federal tax can be based in part on wealth and whether paper gains on assets can be taxed as income before they are sold.

From a political perspective, Democratic leaders may end up caring more about whether they can pass the provision than whether it would survive a court challenge. The billionaires tax can’t be ruled unconstitutional unless it has first become law.

However, the possibility that a successful court challenge would add to the deficit could scare off lawmakers who want to ensure that the “Build Back Better” measure remains deficit-neutral. Biden has promoted his plan as having no cost, because its spending would be offset by new revenue, and Sen. Joe Manchin, D-W.Va., a key swing vote on the overall legislation, has emphasized balancing the revenue and spending.

Still, it is easier for Democratic leaders to count votes than it is for them to predict court rulings.

“I’d give it a 50 percent chance,” said Hemel, who called the wealth tax a “good idea” in a Washington Post op-ed. “We’ve got lots of other options that are 100 percent chance.”

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Politics

‘Disgraceful:’ N.S. Tory leader slams school’s request that military remove uniform

Published

1 day ago

November 8, 2024

Anne Joseph

HALIFAX – Nova Scotia Premier Tim Houston says it’s “disgraceful and demeaning” that a Halifax-area school would request that service members not wear military uniforms to its Remembrance Day ceremony.

Houston’s comments were part of a chorus of criticism levelled at the school — Sackville Heights Elementary — whose administration decided to back away from the plan after the outcry.

A November newsletter from the school in Middle Sackville, N.S., invited Armed Forces members to attend its ceremony but asked that all attendees arrive in civilian attire to “maintain a welcoming environment for all.”

Houston, who is currently running for re-election, accused the school’s leaders of “disgracing themselves while demeaning the people who protect our country” in a post on the social media platform X Thursday night.

“If the people behind this decision had a shred of the courage that our veterans have, this cowardly and insulting idea would have been rejected immediately,” Houston’s post read. There were also several calls for resignations within the school’s administration attached to Houston’s post.

In an email to families Thursday night, the school’s principal, Rachael Webster, apologized and welcomed military family members to attend “in the attire that makes them most comfortable.”

“I recognize this request has caused harm and I am deeply sorry,” Webster’s email read, adding later that the school has the “utmost respect for what the uniform represents.”

Webster said the initial request was out of concern for some students who come from countries experiencing conflict and who she said expressed discomfort with images of war, including military uniforms.

Her email said any students who have concerns about seeing Armed Forces members in uniform can be accommodated in a way that makes them feel safe, but she provided no further details in the message.

Webster did not immediately respond to a request for comment.

At a news conference Friday, Houston said he’s glad the initial request was reversed but said he is still concerned.

“I can’t actually fathom how a decision like that was made,” Houston told reporters Friday, adding that he grew up moving between military bases around the country while his father was in the Armed Forces.

“My story of growing up in a military family is not unique in our province. The tradition of service is something so many of us share,” he said.

“Saying ‘lest we forget’ is a solemn promise to the fallen. It’s our commitment to those that continue to serve and our commitment that we will pass on our respects to the next generation.”

Liberal Leader Zach Churchill also said he’s happy with the school’s decision to allow uniformed Armed Forces members to attend the ceremony, but he said he didn’t think it was fair to question the intentions of those behind the original decision.

“We need to have them (uniforms) on display at Remembrance Day,” he said. “Not only are we celebrating (veterans) … we’re also commemorating our dead who gave the greatest sacrifice for our country and for the freedoms we have.”

NDP Leader Claudia Chender said that while Remembrance Day is an important occasion to honour veterans and current service members’ sacrifices, she said she hopes Houston wasn’t taking advantage of the decision to “play politics with this solemn occasion for his own political gain.”

“I hope Tim Houston reached out to the principal of the school before making a public statement,” she said in a statement.

This report by The Canadian Press was first published Nov. 8, 2024.

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Saskatchewan NDP’s Beck holds first caucus meeting after election, outlines plans

Published

1 day ago

November 8, 2024

Anne Joseph

REGINA – Saskatchewan Opposition NDP Leader Carla Beck says she wants to prove to residents her party is the government in waiting as she heads into the incoming legislative session.

Beck held her first caucus meeting with 27 members, nearly double than what she had before the Oct. 28 election but short of the 31 required to form a majority in the 61-seat legislature.

She says her priorities will be health care and cost-of-living issues.

Beck says people need affordability help right now and will press Premier Scott Moe’s Saskatchewan Party government to cut the gas tax and the provincial sales tax on children’s clothing and some grocery items.

Beck’s NDP is Saskatchewan’s largest Opposition in nearly two decades after sweeping Regina and winning all but one seat in Saskatoon.

The Saskatchewan Party won 34 seats, retaining its hold on all of the rural ridings and smaller cities.

This report by The Canadian Press was first published Nov. 8, 2024.

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Nova Scotia election: Liberals say province’s immigration levels are too high

Published

2 days ago

November 7, 2024

Anne Joseph

HALIFAX – Nova Scotia‘s growing population was the subject of debate on Day 12 of the provincial election campaign, with Liberal Leader Zach Churchill arguing immigration levels must be reduced until the province can provide enough housing and health-care services.

Churchill said Thursday a plan by the incumbent Progressive Conservatives to double the province’s population to two million people by the year 2060 is unrealistic and unsustainable.

“That’s a big leap and it’s making life harder for people who live here, (including ) young people looking for a place to live and seniors looking to downsize,” he told a news conference at his campaign headquarters in Halifax.

Anticipating that his call for less immigration might provoke protests from the immigrant community, Churchill was careful to note that he is among the third generation of a family that moved to Nova Scotia from Lebanon.

“I know the value of immigration, the importance of it to our province. We have been built on the backs of an immigrant population. But we just need to do it in a responsible way.”

The Liberal leader said Tim Houston’s Tories, who are seeking a second term in office, have made a mistake by exceeding immigration targets set by the province’s Department of Labour and Immigration. Churchill said a Liberal government would abide by the department’s targets.

In the most recent fiscal year, the government welcomed almost 12,000 immigrants through its nominee program, exceeding the department’s limit by more than 4,000, he said. The numbers aren’t huge, but the increase won’t help ease the province’s shortages in housing and doctors, and the increased strain on its infrastructure, including roads, schools and cellphone networks, Churchill said.

“(The Immigration Department) has done the hard work on this,” he said. “They know where the labour gaps are, and they know what growth is sustainable.”

In response, Houston said his commitment to double the population was a “stretch goal.” And he said the province had long struggled with a declining population before that trend was recently reversed.

“The only immigration that can come into this province at this time is if they are a skilled trade worker or a health-care worker,” Houston said. “The population has grown by two per cent a year, actually quite similar growth to what we experienced under the Liberal government before us.”

Still, Houston said he’s heard Nova Scotians’ concerns about population growth, and he then pivoted to criticize Prime Minister Justin Trudeau for trying to send 6,000 asylum seekers to Nova Scotia, an assertion the federal government has denied.

Churchill said Houston’s claim about asylum seekers was shameful.

“It’s smoke and mirrors,” the Liberal leader said. “He is overshooting his own department’s numbers for sustainable population growth and yet he is trying to blame this on asylum seekers … who aren’t even here.”

In September, federal Immigration Minister Marc Miller said there is no plan to send any asylum seekers to the province without compensation or the consent of the premier. He said the 6,000 number was an “aspirational” figure based on models that reflect each province’s population.

In Halifax, NDP Leader Claudia Chender said it’s clear Nova Scotia needs more doctors, nurses and skilled trades people.

“Immigration has been and always will be a part of the Nova Scotia story, but we need to build as we grow,” Chender said. “This is why we have been pushing the Houston government to build more affordable housing.”

Chender was in a Halifax cafe on Thursday when she promised her party would remove the province’s portion of the harmonized sales tax from all grocery, cellphone and internet bills if elected to govern on Nov. 26. The tax would also be removed from the sale and installation of heat pumps.

“Our focus is on helping people to afford their lives,” Chender told reporters. “We know there are certain things that you can’t live without: food, internet and a phone …. So we know this will have the single biggest impact.”

The party estimates the measure would save the average Nova Scotia family about $1,300 a year.

“That’s a lot more than a one or two per cent HST cut,” Chender said, referring to the Progressive Conservative pledge to reduce the tax by one percentage point and the Liberal promise to trim it by two percentage points.

Elsewhere on the campaign trail, Houston announced that a Progressive Conservative government would make parking free at all Nova Scotia hospitals and health-care centres. The promise was also made by the Liberals in their election platform released Monday.

“Free parking may not seem like a big deal to some, but … the parking, especially for people working at the facilities, can add up to hundreds of dollars,” the premier told a news conference at his campaign headquarters in Halifax.

This report by The Canadian Press was first published Nov. 7, 2024.

— With files from Keith Doucette in Halifax

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