New Billionaire Tax: Good Or Bad?

While glancing at the news that broke over the weekend, I saw that President Biden wants to propose a 20% minimum billionaire tax. According to CNBC

“The new tax proposal is part of Biden’s 2023 budget expected to be released on Monday. His new spending plan would trim $1.3 trillion from the deficit over the next decade, according to a fact sheet released from the White House on Saturday.”

I am all for everyone paying their fair share of taxes, but I am concerned that this tax will weed out any competition Elon Musk, Jeff Bezos, and Bill Gates may have in the future. As much as I respect these individuals’ work ethics, I do not want them to become untouchable. If someone barely makes billionaire status, taxing 20% on their dollar will remove them from the billionaire list in the future and make it harder for competitors to enter that financial tier. And quite frankly, I don’t want any one of these individuals to become too powerful.

To play devil’s advocate – who cares about the competition of the ultra-rich when those taxes will benefit the poor and help sustain the U.S. Federal Government? Unfortunately, we all should. These three individuals have an incredible impact on the U.S. and global economies as well as foreign relations.

Elon Musk single-handedly saved Ukraine from a communication blackout by providing them access to Starlink satellites. Jeff Bezos allowed people to receive anything and everything that they needed during the COVID-19 pandemic via Amazon delivery packages. Although no longer CEO of Microsoft, Bill Gates gave a massive amount of funding to the World Health Organization and vaccine companies during the pandemic.

While all of the above might have had positive impacts on the global community, the old sayings are still true: “With great power comes great responsibility,” and “Absolute power corrupts absolutely”.I never pretend to be an expert on topics outside of REITs, but I do caution everyone regarding oversimplifying this piece of news to “take from the rich (who don’t need the extra money) and give to the poor (who do).” There are quite a few repercussions of that mantra that might affect us in the future.  

The World According to REITs

But back to my area of expertise! I shared over the weekend that Orion Office REIT (ONL) shares dropped 16%. I recommended it 6 months ago, and have some new data you might want to stick around for. In fact, I will share my current recommendation and some details on ONL in tomorrow’s blog.

For now, here’s the latest from The Daily REITBeat:

  • Pennsylvania Real Estate Investment Trust (PEI): Announced that Christopher Swann and Kenneth Hart have been nominated by preferred shareholders to stand for election to its Board of Trustees as Preferred Trustees.
  • Invitation Homes Inc. (INVH): priced $600 million of 4.15% notes due 2032 and the Operating Partnership intends to use a portion of the net proceeds from the offering to repay all $204.6 million of the securitization-related mortgage loan labeled IH 2018-3They plan to use the remaining net proceeds to repay a portion of the securitization-related mortgage loan labeled IH 2018-2 and for general corporate purposes, which may include, without limitation, working capital, repayment of indebtedness, acquisitions, and renovations of single-family properties and for related activities in accordance with its business strategy.
  • CyrusOne Inc (CONE): Announced the completion of its acquisition by funds managed by KKR, a leading global investment firm, and Global Infrastructure Partners, one of the world’s leading infrastructure investors. The move was made in an all-cash transaction valued at approximately $15 billion, including the assumption of debt. CONE also announced that trading of its shares of common stock has been suspended on the NASDAQ Global Select Market and that the company has requested that its common stock be delisted from Nasdaq.

Lots of news this morning in the REIT World, and below are Friday’s top 10 REIT movers.

(Daily REITBeat)

Brad Thomas is the Editor of the Forbes Real Estate Investor.

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