Skip to comments.A wealth tax is a dumb idea
Posted on 01/25/2023 5:40:41 AM PST by Red Badger
They think they are being clever. But they aren't.
This week, Democrats in states across America — Washington, California, and New York in particular — are proposing wealth taxes modeled after the federal wealth tax originally proposed by Sen. Elizabeth Warren (D-MA). These taxes are nothing like the taxes you are used to.
Instead of taxing a stream of income — the sensible, rational way to raise money for government, from available income streams — they focus on wealthy people and attempt to take a portion off the top of their overall net worth each year. They do not care whether or not any of that wealth is liquid — they just want to take away some of what rich people have.
Such taxes, if rich people are dumb enough to stay in such states and pay them, could force a lot of asset sales that otherwise wouldn't happen. After all, if you are only rich on paper (say, you own valuable land but little cash), you might have to sell a bunch of assets to pay such a tax.
But of course, most rich people (and note that roughly 80% of millionaires did not inherit anything) did not get rich by being stupid. When presented with a threat to their wealth, they react.
Wealth taxes don't work. We know this because they have been tried in at least a dozen European countries. In most cases, they have been repealed. The reason? Such taxes have proven to distort rich people's investment decisions and drive rich people to other countries without raising much money. They are also extremely difficult and expensive to administer. It takes a lot of time and effort to provide a valuation on the fortunes of people who own lots of stuff. And certain assets and investments can be volatile or especially hard to appraise.
France provides the most obvious example of a wealth tax gone wrong. Its wealth tax drove 42,000 millionaires to move to other countries. Ultimately, this destructive experiment in taxation chewed up so much of the country's tax base that it had to be repealed.
And just think: If it's that easy for French millionaires to move to entirely new countries to avoid an unnecessary expense like an annual wealth tax, how much easier will it be for affluent Americans just to move from one state to another? Unlike those French, the many multimillionaires in California, Washington, and New York won't even need passports or naturalization papers to relocate themselves to Nevada or Utah. What's more, the states that will never enact wealth taxes are often much nicer places to live than the ones that are considering them now. It's less than a five-hour drive from the homeless tent city of Seattle to beautiful, clean Coeur d'Alene, Idaho, where everyone is armed and state-funded agencies won't even try to trans your children behind your back.
For a multimillionaire or a billionaire, an annual wealth tax means that the sight-unseen purchase of a home in another state (Florida and Texas are popular choices) might pay for itself within a month or two.
But the impracticality of wealth taxes isn't even the strongest argument against them. The strongest argument is that the burden of proof that such a tax is needed or useful in any way is entirely on those who would impose it. And there is no rational basis for the Left's panicky and resentful feelings toward the affluent, which comprise the entire rationale for such taxes.
No, the rich are not gobbling up all of America's wealth. With the possible exception of Democratic politicians who miraculously become millionaires in office, the rich become rich by providing people with goods and services they want. You, dear reader, personally chose to help make someone ultrarich when you purchased that iPhone, that electric vehicle, or that popular chicken sandwich. You and all other consumers do this every day.
Meanwhile, as the number of millionaires and billionaires grows with the economy over the long run, the living standards of poorer and middle-income people continue to rise. In fact, when you include welfare and other transfer programs, the supposed statistical evidence for income inequality almost vanishes. And so does poverty.
Thank goodness free markets are making this happen all over the globe.
In the end, the Elizabeth Warrens of the world need to learn that envy and resentment are no basis for making tax policy. Warren has to let up with the resentment, grab herself a beer, and calm down.
Will the woke uber-liberal Hollywood/Entertainment A-Listers support this? LOL!
Just dont forget to make a poverty tax too! Oh...wait...
How about an illegal immigrant tax? How bout a corrupt presidents derelict druggie son tax?
And that has stopped the Left from pushing one because?
A wealth tax isn’t a no go because it is counterproductive.
It’s s no go because Deep State is made up of the uber wealthy.
Deep State will never tax itself.
It’s good to be Deep State.
1. Warren has outlived her usefulness, and, have existed long beyond ‘her warranty’. She must be tired of raiding credit unions.
2. I suggest that the low-tax state of Texas invite the targets of Warren’s current hatred to relocate, to include their incorporative located offices, from those states which have signed ont Warren’s prooposal.
This is the Uber Wealthy’s way of making sure there aren’t any more like them. They dislike competition..............................
High taxes destroy wealthy people and economies. The government only wastes money and spends more than they take in. At least wealthy people provide capital to add value or services and goods to other people.
Get it! People Hate Rich People. Why are they rich and I’m not? Tax the rich is a way to get the Revenge Vote. Wait for the communists who say—Kill the rich. All for “The People”. Note: none of the political people saying this are poor! All are rich.
It was supposed to raise $9 billion, but instead killed the yacht building industry.
The Uber Wealthy love Capitalism until they actually become the Uber Wealthy, and then they want Communism.................
Communism is less of a governing philosophy, these days, and more of an oligarchical management tactic to control The Little People.
Yes, regardless of what Marx & Engels thought they were creating, the system becomes a tyrannical tool of despots to control the masses...................
At some point there will need to be a liberal tax on paper, because of all of the paper sent out each year to justify your entry on your tax return of how much the government should tax you. It's only fair.
The strongest argument is that taxes of this sort are nothing more than theft.
There is already a Wealth Tax.
Save your after tax money. Invest in property. Sell property, pay Capital Gain tax. Die then pay Intermittence tax.
In the meantime pay property taxes you are charged just for owning the property.
Introduced in House (03/09/2023)
Tax the Rich Act of 2023
This bill imposes a national tax on the excessive rich, defined as any person or entity with combined money and assets exceeding 1 million dollars. Excluded from this tax are U.S. legislators and justices, political PACS, social justice non-profits and individuals and entities located in municipalities running a deficit that's greater than 20% of their received taxes.............
We might think that the SCOTUS would strike down such a bill but the fact is that Congress has passed numerous bill that exempt Congress and other groups.
It will provide an abundance of tax loopholes to be sold by Congress like in the 1950s through 70s. Next year Guatemalan fruit bat ranches will be made exempt. Then those on the A list will put their properties into trusts owned by their bat ranches while those not approved will have their bat ranches audited and disapproved.
That would imply that Warren was at one time useful. Near as I can tell she was never good for anything and was always a shrill harridan wanting to plunder the successful segment of the populace to squander the loot on the gimmies (while of course keeping a significant portion for herself and her deep state accomplices)
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