Elizabeth Warren proposes 'wealth tax' on the very rich

Senator Elizabeth Warren is proposing a "wealth tax" on Americans with more than $50 million in total assets. She is advocating for a 2% tax on those worth more than $50 million and 3% on those with a billion dollars or more in assets.

National Review:

“The Warren wealth tax is pretty big. We think it could have a significant effect on wealth concentration in the long run,” Saez told the Post. “This is a very interesting development with deep root causes: The fact inequality has been increasing so much, particularly in wealth, and the feeling our current tax system doesn’t do a very good job taxing the very richest people.”

The proposal seeks to address the tax evasion that fiscal conservatives argue would reduce the efficacy of any wealth tax by allocating additional resources to the IRS, imposing a one-time penalty on Americans who renounce their citizenship to avoid the tax, and requiring that a certain percentage of those affected by the tax undergo a yearly audit.

The proposal is supposed to raise $2.75 trillion over 10 years, or about 10% of the "Medicare for All" proposal Democrats have been floating. I will believe it when I see it. The grandiose "projections" for how much revenue these taxes on the super rich will raise are always spectacularly off. When France passed a wealth tax in 2012, they projected income from the measure to be 30 billion euros. They got 14 billion, which left a gaping hole in their budget.

Besides the dubious chances for success, it may be that such a tax would be unconstitutional:

Academic critics of the wealth tax have previously called into question its constitutionality, citing the prohibition against “direct” taxes not apportioned by the states according to population. 

Allahpundit outlines the true nature of the confiscation:

Really, though, no Democrat be credited with some sort of policy innovation for a “soak the rich” proposal. This is rudimentary leftism, perfectly salable to a Democratic primary audience and maybe beyond in 2019. The bad news: The long march from taxing the ultra-rich to the very rich to the rich to the middle class has begun. The good news: If Warren’s plan is enacted, which it won’t be, we’ll be able to pay for not quite a tenth of “Medicare for all.”

Punishing success hurts the economy and the poor will be hurt the most. But beyond the obvious economic drawbacks, the proposal is revealing of a divide between the right and left on the nature of property.

The left believes your income, or property, belongs to the government and it is up to Washington to determine how much of it you can keep. The right believes citizens decide how much of your income or property the government can take. One side believes in confiscation; the other, expansion. It's not a question of whether the rich "can afford it." Of course they can. It's a very important principle at stake that Democrats want to discard.

As Allah mentions, this proposal is going nowhere. It's doubtful that even a majority of Democrats would support it. But the ideology that animates Warren's ideas is gaining traction among the young and it may be only a matter of time before "wealth tax" is enacted.

Senator Elizabeth Warren is proposing a "wealth tax" on Americans with more than $50 million in total assets. She is advocating for a 2% tax on those worth more than $50 million and 3% on those with a billion dollars or more in assets.

National Review:

“The Warren wealth tax is pretty big. We think it could have a significant effect on wealth concentration in the long run,” Saez told the Post. “This is a very interesting development with deep root causes: The fact inequality has been increasing so much, particularly in wealth, and the feeling our current tax system doesn’t do a very good job taxing the very richest people.”

The proposal seeks to address the tax evasion that fiscal conservatives argue would reduce the efficacy of any wealth tax by allocating additional resources to the IRS, imposing a one-time penalty on Americans who renounce their citizenship to avoid the tax, and requiring that a certain percentage of those affected by the tax undergo a yearly audit.

The proposal is supposed to raise $2.75 trillion over 10 years, or about 10% of the "Medicare for All" proposal Democrats have been floating. I will believe it when I see it. The grandiose "projections" for how much revenue these taxes on the super rich will raise are always spectacularly off. When France passed a wealth tax in 2012, they projected income from the measure to be 30 billion euros. They got 14 billion, which left a gaping hole in their budget.

Besides the dubious chances for success, it may be that such a tax would be unconstitutional:

Academic critics of the wealth tax have previously called into question its constitutionality, citing the prohibition against “direct” taxes not apportioned by the states according to population. 

Allahpundit outlines the true nature of the confiscation:

Really, though, no Democrat be credited with some sort of policy innovation for a “soak the rich” proposal. This is rudimentary leftism, perfectly salable to a Democratic primary audience and maybe beyond in 2019. The bad news: The long march from taxing the ultra-rich to the very rich to the rich to the middle class has begun. The good news: If Warren’s plan is enacted, which it won’t be, we’ll be able to pay for not quite a tenth of “Medicare for all.”

Punishing success hurts the economy and the poor will be hurt the most. But beyond the obvious economic drawbacks, the proposal is revealing of a divide between the right and left on the nature of property.

The left believes your income, or property, belongs to the government and it is up to Washington to determine how much of it you can keep. The right believes citizens decide how much of your income or property the government can take. One side believes in confiscation; the other, expansion. It's not a question of whether the rich "can afford it." Of course they can. It's a very important principle at stake that Democrats want to discard.

As Allah mentions, this proposal is going nowhere. It's doubtful that even a majority of Democrats would support it. But the ideology that animates Warren's ideas is gaining traction among the young and it may be only a matter of time before "wealth tax" is enacted.