Dems Abandon Billionaire Tax That Faced Constitutional Hurdles

An aborted Democratic plan to tax assets held by billionaires was vulnerable to attack on constitutional grounds, experts told the Washington Free Beacon.

The Constitution authorizes three forms of taxation, and tax-law gurus interviewed by the Free Beacon said the ill-fated billionaire's tax did not fit neatly in any of those categories. The measure would have taxed assets that appreciate in value year over year—like a stock or a closely held company—which aren't currently taxed until they're sold.

Senate Finance Committee chairman Ron Wyden (D., Ore.) on Wednesday morning unveiled the billionaire's tax...