Sometimes, it seems that the establishment media and the Democratic Party instantly decide that a word means something it never meant before and they suddenly start speaking that way — without informing the readers.
This recently happened with “man” and “woman,” and now, it’s happened with “income.”
Scoop: Biden’s budget on Monday to propose “Billionaire Minimum Income Tax”
1st time WH has so directly targeted billionaire wealth
Would create minimum 20% rate on income above $100M
400 billionaire families paid *8.2% federal rate* from 2010-18https://t.co/zsn0xto36J
— Jeff Stein (@JStein_WaPo) March 26, 2022
From that tweet by Washington Post reporter Jeff Stein, one might assume that some of these billionaires’ taxes equaled 8.2% of the money they made last year. One might assume President Joe Biden’s proposed “billionaire tax” applies to income over $100 million per year.
Neither is true unless one understands that the media have suddenly changed the definition of “income.” The new definition includes unrealized gains as income. That is, if a person owns something that becomes more valuable, even if he or she didn’t sell it, can’t sell it, and never will sell it, then that increase in value counts as income.
We could have a debate as to whether we should tax the unrealized wealth gains of people, or maybe just some unrealized gains, or maybe just the unrealized gains of very, very wealthy people, but our interest in informing the citizenry suggests we shouldn’t slyly change the definition and thus fool our readers.
When you apply for a credit card or a lease, you are asked for your annual income. Imagine an applicant who thinks, “Well, my house is $20,000 more than it was a year ago, and due to COVID weirdness and inflation, my Honda Odyssey actually appreciated about $4,000. Plus, the S&P 500 is up 16% year over year, which means my IRA from my last job grew by $6,000 even though I didn’t add to it. I’ll add that $30,000 to my salary, and that’s my income.”
This person might end up in jail for falsely claiming this $30,000 as income.
In the normal way of talking about things, income includes money that comes in, which one could spend on things. When a person owns an asset and it increases in value, we don’t normally call that “income,” unless he or she sells the asset and pockets that gain.
Sure, an accountant or an economist could call asset appreciation “income” because it represents an increase in wealth. But in ordinary parlance, “income” is money that comes in.
The IRS has a definition of income that mostly overlaps with the common understanding of the word. (Yes, the IRS includes in income not merely money but also services and property. This can get confusing, but it’s a way to prevent people from avoiding taxes by engaging only in barter. What matters is that “income” is stuff or services someone gets and can use.)
So yes, Stein at the Washington Post can make the case, if he likes, that all wealth increases should be taxed, at least for very rich people, but he should distinguish between unrealized gains and actual usable income. And when Biden or congressional Democrats intentionally blur that distinction, reporters should be sure not to play along.
