Warren’s plan would also effectively get rid of any tax advantages for capital gains income. She’s calling to raise the capital gains tax rate -- currently at 23.8% -- to match the top rate on wages, which is currently at 37% but would likely go up under a Warren administration.
She’s also calling for the wealthiest 1% of households to pay capital gains taxes annually on their stock and real estate appreciation. Currently, those assets can grow tax-free and levies are due when they’re sold.
Expand the IRS
Investors would also get hit when they buy or sell stock, bonds or other securities. Warren would tax those transactions at 0.1% -- a levy that would especially hit day traders and money managers that frequently re-balance their portfolios.
Warren also relies on greatly expanded Internal Revenue Service audits to generate $2.3 trillion in revenue over a decade. She says these audits would collect tax revenue owed, but not collected, under current law.
The difference, known as the tax gap, has plagued the IRS for years as the agency’s budget and staff has been slashed. Finding that money is an exceptionally difficult feat; the IRS admits that its own staff struggles to stay ahead of tactics creative tax professionals devise for their wealthy clients.
--With assistance from Misyrlena Egkolfopoulou and Laura Davison.
This article was provided by Bloomberg News.