Economy

Booker Says Warren's Wealth Tax Would Destroy Economic Growth

"It's been tried by other nations," the New Jersey senator said.

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Sen. Cory Booker (D–N.J.) on Wednesday pushed back against Sen. Elizabeth Warren's (D–Mass.) wealth tax proposal, telling one of the Democratic primary frontrunners that her plan would stifle growth and entrepreneurship.

"We all agree we need to bring in a lot more revenue," Booker said at the November 20 debate, adding that he "[does not] agree with the wealth tax."

Warren's proposal would place a 2 percent tax on all assets over $50 million and another 1 percent on top of that on assets over $1 billion. On its face, it sounds like a perfectly progressive proposal in line with party values that could raise revenue for programs to benefit the middle class.

But if history is any indication, Booker is right, and Warren's policy is destined to fail. Just ask France. Or the Netherlands. Or Austria. All of those countries discarded the wealth tax after it quashed entrepreneurship and failed to produce the desired government funding.

As Reason's Peter Suderman notes, Sweden eliminated the policy as it "was frequently blamed for capital flight" and people "were less likely to own their own business." Potential investors were moving money abroad—where they wouldn't be subject to the tax—instead of putting the money back into the Swedish economy. That includes the founder of Ikea, who routed a large portion of his finances into offshore foundations. In that vein, the government essentially lost no revenue when it nixed the tax.

Booker zeroed in on that theme Wednesday night, emphasizing the need to reinvigorate the economy and empower would-be business owners.

"The tax the way you're putting it forward, I'm sorry, it's cumbersome," Booker said. "It's been tried by other nations." Instead, he says the U.S. must refocus on "how to give more people opportunities to create wealth, to grow businesses, to have their American dream."

Booker then immediately pivoted to a federal $15 minimum wage. The problems with that approach are numerous, but can be aptly summed up by the fact that such policies hurt the people they're trying to help, like low-skilled workers. And that's doubly true here, as the wage floor can also be an insurmountable barrier for small businesses trying to stay afloat and for potential entrepreneurs who can't afford to launch a business while paying an arbitrary minimum wage. In other words, it doesn't exactly stir entrepreneurship.

Even so, Booker highlighting the importance of free enterprise was a refreshing way to kick off the debate. At least someone on the Democratic stage is talking about how to make money rather than just take it.

NEXT: Tulsi Gabbard Slams Kamala Harris' Foreign Policy: 'She as President Will Continue the Status Quo Regime-Change Wars'

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  1. At least someone on the Democratic stage is talking about how to make money rather than just take it.

    ???

    “We all agree we need to bring in a lot more revenue,” Booker said at the November 20 debate…

    I’m quite sure bringing in a lot more revenue involves taking it.

    1. As government, at all levels, currently spends 43% of the entire economic output of the country, I beg to differ.

    2. Kennedy made the point that prior tax decreases had led to tax revenue increases due to increased economic output.

  2. We need a Constitutional amendment that frees the economy from government tyranny because the government cannot control the economy except in socialist structures.

    Tax policies should be based on user pay concepts and social welfare programs should be left to private, non-profit and for-profit enterprises.

    1. Tax policies should be based on user pay concepts and social welfare programs should be left to private, non-profit and for-profit enterprises.

      Those both existed once. Charles Dickens – maybe you’ve heard of him – experienced the former (left school at 12 when his father/mother/younger siblings were forced into debtors prison – he was deemed old enough to ) and wrote about the latter. They were even so happy then they sang songs. Earlier, that was called indentured servitude and is why most colonial era migrants came. I’m sure they sang songs too. Even earlier, it was called debt slavery. And we know they sang songs.

      Funny how some modern ‘libertarians’ advocate a return to debt slavery. Even Adam Smith said this sort of idea was daft. He was obviously a commie though.

      1. You ought to learn ALL of history rather than just the sound bites you picked up somewhere. Read about mutual aid societies, also known as the lodges. Read how they contracted with doctors for health care and how the AMA cronied up with state governments to ban that because they wanted to restrict the number of doctors so as to raise the fees they could charge. Read up on how other cronies drove them out of the welfare and charity business because they wanted government to control who got charity, not friends and neighbors.

        Your ignorance means you must be a Democrat.

        1. I’m very familiar with mutual aid societies. I descend from a long line of Freemasons and funny old men in funny old hats who drive little cars around at parades – and before that circuit riders and country doctors and others who walked the talk. I also, unlike you apparently, know why that world disappeared. Long before Dickens time in England and certainly well before WW2 in the US. And it wasn’t cuz of the AMA or gummint.

          You know who I’ve pretty much never seen at any private volunteer type event? Folks like you with no social skills who regularly blame the victim as part of your politics. It’s laughable that you think you offer any credibility whatsoever re remaking and restoring voluntary aid associations.

          1. Gosh you pegged me! Gosh you know my innermost thoughts! Gish you are knowledgeable!

            Stop trying to control other people. MYOB, as the saying goes. Or, as another saying goes, fuck off, slaver!

            Why the holy fuck do you progtards think it is so vital to your personal success to control other people, to steal their money to control them? What the fuck is wrong with morons like you? Why can’t you just mind your own business and let other people mind theirs?

  3. Instead, he says the U.S. must refocus on “how to give more people opportunities to create wealth, to grow businesses, to have their American dream.”

    If I didn’t know better, I’d say Booker is sounding dangerously close to saying he might be a capitalist.

    1. Yep. He’s getting *that* desperate.

  4. “”We all agree we need to bring in a lot more revenue,”

    Fuck you, cut spending.

    1. Can I get an Amen?!? AMEN!!

  5. I can never vote for a candidate who believes in AGW, because that is something in which a Prez can actually create serious mischief. All Donkeys fail. Hence, Trump.

    1. I heard there’s likely to be another candidate in the presidential race this year, besides the red or blue team ones. Shocking to hear, I know. Certainly unprecedented.

  6. You know what hurts the economy far more than any current Democratic proposal? Restricting immigration.

    There are so many highly skilled doctors and engineers desperate to cross the US / Mexico border and contribute to our economy. And Orange Hitler locks them in concentration camps and forces them to drink from toilets.

    #ImmigrationAboveAll
    #VoteDemocratForOpenBorders

  7. File this under “even a blind squirrel finds a nut once in a while” Good for Spartacus

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