The big concern about taxing unearned income suggested now for billionaires, is that similarly, it's a slippery slope. Pretty soon they'll tax millionaires, then all the rest of the country so our 401K retirement plans will be taxed even before we use them. Investments in stock will be taxed every year if the value goes up even before you sell it. It's all just another way to get more taxes out of us.
Of course, that creates economic imbalances and maladjusted investments. If they only tax liquid investments like stocks, everyone will shift to real estate causing that market to get priced out of sight. Start-up companies and existing corporations won't be able to find investors hurting business growth and jobs. This creates winners and losers (Real estate vs. stock) and malinvestments all caused by the government. The negative effect with hurt the whole economy.
The right way to do it is to stop spending beyond our means. Of course, that's too simple for all the socialists and big spenders in Washington.
Not only slipery, but outright stupid.
If such a law should pass, all the billionaires in order to pay the new tax would have to sell a good portion of their holdings, which would push the stock prices lower and hit also the sub-billionaires (including even pensioners and union factory workers with small to medium stock holdings). Many investors using margins or other loans would be forced to reduce their holdings and that would cause a big stock market collapse and serious losses for all investors. While the politicians who voted for such a law would introduce another law to re-index higher their pensions and salaries.
