Senator Warren’s Wealth Tax Is a Terrible Idea |
Democratic politicians always need causes to keep their base riled up. Senator Elizabeth Warren of Massachusetts has proposed a wealth tax on the superrich — people like Jeff Bezos. If the feds took away a lot of his money, good things could be done with it, and he’d barely miss it. So why not?
In his latest Bastiat’s Window post, economist Robert Graboyes subjects her proposal to withering scrutiny:
Warren claims the tax would fall only on “ultra-millionaires.” For these individuals, the tax would fall on: “[a]ll household assets held anywhere in the world will be included in the net worth measurement, including residences, closely held businesses, assets held in trust, retirement assets, assets held by minor children, and personal property with a value of $50,000 or more.” Those individuals wishing to renounce their citizenship and move abroad would be assessed an amount equivalent to 40% of the wealth. Wealth taxes have long been a Holy Grail of populists (mostly on the Left).
Warren claims the tax would fall only on “ultra-millionaires.” For these individuals, the tax would fall on:
“[a]ll household assets held anywhere in the world will be included in the net worth measurement, including residences, closely held businesses, assets held in trust, retirement assets, assets held by minor children, and personal property with a value of $50,000 or more.”
Those individuals wishing to renounce their citizenship and move abroad would be assessed an amount equivalent to 40% of the wealth. Wealth taxes have long been a Holy Grail of populists (mostly on the Left).
What’s wrong with the concept?
For one thing, Graboyes argues, it’s the camel’s nose under the tent: Even though the wealth tax is supposed to hit only the superrich, it will certainly expand and expand, just as the federal income tax did.
Graboyes also thinks we ought to question the wisdom of giving the feds a vast new revenue stream. Will the funds really be spent on necessary things? And what about the opportunity cost — the investments or philanthropy that will be choked off because the feds took money that those superrich would have used for good purposes?
He also notes the toxic rhetoric Warren employs, making it seem as though the reason why some people are poor is that superrich Americans have way too much.