The Supreme Court May Eliminate One Third of All Federal Revenue With the Stroke of a Pen

That's what Paul Ryan says, anyway, and I'm inclined to believe him.

Behold James Madison, fourth president of the United States who wrote, in Federalist 51: “If men were angels, no government would be necessary.” In my latest New Republic piece, I apply the same logic to the taxation of unrealized capital gains. If people behaved a bit better, the federal government could confine itself to taxing capital and labor income. But they don’t—not the rich ones, anyway. They hide their money in tax havens and commit various other types of chicanery to avoid paying their fair share. And so, for them, the feds sometimes tax income they haven’t cashed out. This is not the same as a wealth tax, though some people will tell you it is. Anyway, the Supreme Court will tomorrow hear arguments in a case that will tempt the high court to outlaw the taxation of unrealized capital gains, thereby eliminating about one-third of all existing tax revenue, according to former House Speaker Paul Ryan, who is a conservative Republican. You can read my piece here.