Why a Wealth Tax Is Not the Answer
Here’s a real beauty – a slap for all the quasi-socialists among us.
If you remember the song from the ’80s – “Edna” by Strapped – that has the line “Whip me, beat me, call me Edna,” then you’ll love this one.
Sen. Elizabeth Warren was recently joined by 18 uber-wealthy people in asking for a moderate wealth tax.
Names like Disney, Munger, Soros, and Pritzker (along with Facebook co-founder Chris Hughes), to name a few, signed a letter asking for a tax on all their assets, not just on their cash and investments.
They called it their moral and ethical economic responsibility to this country.
The Wall Street Journal opinion section had an interesting response to their request for more taxes: Why wait? Yes – why wait for the government to take your money as a tax and use its cut to support the hordes of bureaucrats?
If this is their moral responsibility, they should write the checks now.
Do it now, and avoid the possibility of Trump being reelected and blocking the tax (which I’m sure he would do).
But before these moral billionaires start shoveling money at the masses or before the government somehow enacts this tax, let’s look at how wealth taxes have fared in other parts of the world.
Twelve European countries had wealth taxes in 1990. Only three continue to impose those taxes today.
Some of the reasons the taxes went away? In France, 42,000 millionaires (and richer) just left with their wealth. In Austria, the tax was too costly to implement.
While we’re at it, how do you value racehorses, paintings and yachts? And is the government equipped to do it? I doubt it.
There were also situations in Europe where people had big assets, but not so much cash. We already see this when a family farm gets caught in the estate tax trap.
There’s lots of land, and it’s worth a lot of money. But there’s no cash to pay the tax. The farm usually has to be sold.
And what rational person would give this government that has run up $21 trillion in debt more money? It has had increasing tax revenues for decades and still managed to run up mountains of debt.
These people want to give this government more money? Really?
But fear not: The reason the whole wealth tax thing is even an issue in this election is because an economist – Gabriel Zucman from the University of California, Berkeley – says Sen. Warren has the exodus thing (that wiped out so much wealth in France) covered.
(She also wants a 40% exit tax if a person leaves the U.S. and renounces their citizenship. If they leave but remain citizens, even current laws make it possible to tax them anywhere in the world – no matter where their assets come from.)
When I read the letter from the uber-wealthy, I thought back to my last trip to Santa Fe. I wrote a piece about this last year.
This is a wealthy town full of Bentleys and other overpriced cars, and many have Bernie stickers on them. I wonder if any of these folks know where the money to pay for those cars came from? I can assure you it wasn’t from wealth or exit taxes.
Tax me, tax me, call me moral and ethical…