Wealth Taxes Expected To Remain A Hot Topic In 2024

Wealth taxes are a contentious issue, with proposals at the national and state levels in the U.S. and the Supreme Court expected to rule on their constitutionality. Wealth advisors advise clients to consider the implications as such ideas gain momentum. Various proposals differ, such as California’s plan to tax the wealthiest residents on their wealth and New York’s proposal to tax unrealized gains annually. 

The Biden administration introduced taxes targeting the wealthy, including a minimum annual income tax for households with a net worth exceeding $100 million. The Billionaires Income Tax Act aims to close tax loopholes, impacting tactics like “buy, borrow, die.” The act would mark tradable assets to market each year for tax purposes. 

Some fear unintended consequences, such as incentivizing investors to sell assets. While a federal wealth tax lacks broad support, a Supreme Court case challenges the constitutionality of taxing unrealized income. However, early indications suggest the court may not invalidate such taxes. The 2025 sunset of the Tax Cuts and Jobs Act provisions is also a client consideration.

For more information see Jeff Stimpson “Wealth Taxes Expected to Remain A Hot Topic in 2024”, Financial Advisor, December 27, 2023.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.