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Elizabeth Warren's Wealth Tax Is a Stunt Policy That Other Countries Have Tried and Discarded

Her big new tax plan is impractical, ineffective, and probably unconstitutional.

BRIAN SNYDER/REUTERS/NewscomBRIAN SNYDER/REUTERS/NewscomElizabeth Warren's wealth tax is the worst form of stunt policy: a bad idea that gets us nothing.

Also, of passing importance, it's probably unconstitutional.

The plan, released last week as the Massachusetts senator launched her bid for the Democratic Party's 2020 presidential nomination, would impose a 2 percent annual tax on assets for households worth more than $50 million, plus a 1 percent surtax on households with a net worth of $1 billion or more.

Warren says the tax would affect only the "tippy top 0.1%," or about 75,000 households. She has framed the proposal as a way to make them "pay their fair share," to reduce wealth concentration, and to "accelerate badly needed investments in rebuilding our middle class." Estimates from the Berkeley economists Emmanuel Saez and Gabriel Zucman, who back the proposal, suggest it would raise about $2.75 trillion in new tax revenue over a decade.

So it's being advertised as a revenue raiser that boosts the government's capacity to fund programs for the middle class. But the real-world experience of nations that have imposed wealth taxes suggests that this is a bit optimistic. Regular wealth taxes tend to be a challenge for tax collectors. They require annual assessments of wealth, and the very rich tend to own unique assets that can be difficult to value.

As the Tax Foundation's Nicole Kaeding and Kyle Pomerleau note, the very rich "own more than publicly-traded stock, such as real estate holdings, trusts, and business ownership interests. It is difficult to value these assets on an ongoing basis. Imagine a large privately-held company—its value could change almost daily. How would the tax handle these fluctuations?"

To handle the challenge, Warren has called for increasing the number of agents at the Internal Revenue Service—rarely a promising sign for a campaign proposal. In any case, inherently tricky valuations remain tricky no many how many bureaucrats you throw at the problem.

More likely, the rich would find ways to avoid those assessments entirely. Sweden's wealth tax, for example, was frequently blamed for capital flight and a depressed rate of national entrepreneurship. Relative to other European nations, Swedes were less likely to own their own business, and those who did often took their money elsewhere rather than reinvest it at home. The founder of Ikea, for example, moved much of his wealth into offshore foundations that shielded the money from the tax.

I say it was blamed because a little more than a decade ago, Sweden eliminated its wealth tax. The move was easy to make, because the government lost essentially no revenue. As The Financial Times reported, the elimination of the tax had "virtually no effect of government finances." So much for making the rich pay their share.

Nor is Sweden an outlier in its decision to nix a tax on wealth. European countries that have imposed wealth taxes have largely given up on them; of the dozen OECD nations that had wealth taxes in 1990, just four still have the tax on the books. Warren wants the U.S. to adopt an idea that has been tried and discarded.

Her proposal is unlikely make it through Congress and past the president's desk. But even if it does, we might not ever find out what sort of revenue it would raise, because it would be quickly challenged in court as unconstitutional.

Aside from the income tax, which required a constitutional amendment before it could be implemented, the Constitution prohibits the federal government from levying "direct taxes"—taxes that aren't spread out amongst the states according to population. Some proponents of the estate tax have argued that it could pass constitutional muster, but opinions are split, and there's probably more reason than not to believe that it would be struck down. When estate taxes were challenged, for example, they were upheld as taxes on the transfer of wealth rather than on its existence. That wouldn't be true in this case. Warren's wealth tax would target fortunes simply for existing.

Which I suppose is the point. Taxes are typically imposed for one of two purposes: to raise revenue, or to discourage behavior that politicians dislike. In this case, what Warren doesn't like is the fact that some people have amassed large personal fortunes, sometimes through inheritance, but often by starting or running successful businesses. She wants an America where that happens less often, or where, when it does happen, the wealth ends up elsewhere.

Warren's proposed wealth tax is thus best understood not as a targeted revenue raiser, but as a symbolic declaration of opposition to the existence of outsized wealth, irrespective of how it was obtained. She has described it as a tool for addressing inequality, but really it is a presidential candidate's way of saying, "I oppose the existence of very rich people." She could have just said it.

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  • Crusty Juggler||

    Those other countries didn't have America's exceptionalism, Peter.

  • ||

    Some of us have to get by on the unique assets that are hard to value that God gave us.

  • Tul­pa||

    When did this become the Sex Work blog?

  • Jerryskids||

    The premise of the tax is fundamentally flawed in that it assumes politicians in Washington will do a better job than the super-wealthy at spending investing this money for the greater good. At heart, it's simply anti-capitalist cheerleading for the eating of the seed corn as the merest cursory glance at the national budget shows that government has absolutely no financial impulse control and no sense of delayed gratification whatsoever.

  • esteve7||

    no the flaw is it assumes your money is not yours and everything is owned by the government.

  • Zeb||

    But that's the flaw with all taxes.

  • esteve7||

    ding ding ding

  • gah87||

    As Bill DeBlasio said, "there's plenty of money out there, it's just in the wrong hands."

  • Mickey Rat||

    Eating the seed corn? It is also burning down the fields and salting the earth.

  • loveconstitution1789||

    From each according to his ability, to each according to his needs

  • Incomprehensible Bitching||

    I'll do you one better:

    "To each according to their desires."

    Top that, bitch!

  • Enjoy Every Sandwich||

    "To each according to their position in the Victim Hierarchy."

  • a ab abc abcd abcde abcdef ahf||

    "As determined by other more righteous victims."

  • loveconstitution1789||

    "Without doubt, machinery has greatly increased the number of well-to-do idlers."
    -Karl Marx

  • Longtobefree||

    The real objective is plainly to further interfere with successful small / privately held businesses, and expand the federal bureaucracy with more 'appraisers' who will not be challenged on the values they assign.

    Or this is just another bullshit talking point for the lapdog media to fantasize over.

  • Enjoy Every Sandwich||

    No doubt Warren will tout this as "proof" that the "free" healthcare, "free" college, "Green New Deal", etc., are "paid for". The fact that no money will actually come in is--look, a teenager in a MAGA hat! With a smirk!

  • Kevin Smith||

    Which is total BS, for all the wealth the "tippy top 0.1%" have, they are still paupers compared to how the federal government spends money. We could impose a 100% wealth tax and seize the entire fortunes of every billionaire in the country and it wouldn't cover the deficit for 2 years, let alone fund all these trillions of dollars in additional spending

  • a ab abc abcd abcde abcdef ahf||

    See my post below; $3T for the Forbes 400. And impossible to actually confiscate in the form of liquid cash.

  • Rich||

    Warren says the tax would affect only the "tippy top 0.1%,"

    trying to indicate by her speech she is, if not a Native American, a woman.

  • esteve7||

    sorta like the AMT was supposed to only impact the top few hundred people and now it impacts millions.

    yeah you are a fool to believe it will only be limited to the 'tippy top'. not like that makes it any less morally reprehensible.

  • Signer||

    Misquote. She said "teepee top".

  • loveconstitution1789||

    Warren says the tax would affect only the "tippy top 0.1%,"

    Is that more or less than 1/1024?

  • Heraclitus||

    "I oppose the existence of very rich people"

    Yeah, that probably is a good summary of what she is trying to do. She is hitting upon something though that we are afraid to talk about. At least the author added "very". The very rich use their wealth to control the government in order to extract economic rent. The libertarians at Reason should understand how this works. While it would be nice to believe the fantasy that the "very rich" earned every penny toiling away with their outsized brains we all know this is hogwash. They acquire patents and then hire lawyers to fiercely extend their patent protections for decades. They land big government contracts. They acquire rights to minerals under the ground by muscling out smaller companies for those rights. We could go on and on but it's the way wealth works. All this and I haven't even mentioned how they meddle with our election system by making it impossible for working class people to get involved in politics without having to bend their platforms to fulfill the desires of the donors. They have to spend all their time calling donors on the phone instead of crafting good legislation. Obviously, if your priority is calling donors you are going to make darn sure your voting record is aligned with the desires of those donors. So yeah, large pockets of wealth are a problem. Is the wealth tax the answer? I don't know, but at least one politician is making it an issue.

  • Sevo||

    "...We could go on and on but it's the way wealth works...."

    I'm sure you could go on and on, what with the other guy on the grassy knoll, Elvis' alien love child and that meeting between Hitler and Nixon in Paraguay, right?
    Amazon has a special in tin foil hats, but you're seems to be doing just fine...

  • a ab abc abcd abcde abcdef ahf||

    that meeting between Hitler and Nixon in Paraguay


    I knew it! I knew Nixon was to blame for Pearl Harbor!

  • Sevo||

    Well, we fixed them when we nuked Berlin while Hirohito was visiting! I read about it in another of Heraclitus' comments.

  • I'm Not Sure||

    "So yeah, large pockets of wealth are a problem."

    So yeah, large pockets of wealth using the power of government to benefit themselves are a problem.

    FIFY

  • esteve7||

    see the problem isn't our scumbag politicians, it's the rich! we should give the politicians more power

    you have to be a fucking idiot to believe this

  • Chipper Jones||

    This really sums it up. They honestly believe that the rich taking advantage of government largesse is the problem and the solution is to give government more power.

  • JFree||

    Excellent comment.

    Yes - economic inequality leads directly to political inequality. Always and everywhere. And that political inequality leads directly both to the distortions of govt to protect the existing economic inequality - and more insidiously to the decisions govt makes that either ignore or quickly forget that influence (WW1 - are French/British or German loans more important? TARP - revolution in the streets if we allow markets to work and assets to be repriced? Arbenz - commie or land reformer? on and on)

    I think it is really sad that ONLY the left is willing to actually talk about the effects of that political inequality. Because they only have one solution - eliminate political inequality by eliminating economic inequality. And the failure of anyone else to be allowed to discuss the issue - propose different ways of dealing with the problem - means that only the left can fill the ideas vacuum when the issue becomes REALLY obvious as a problem.

  • middlefinger||

    The right used to talk about it. Friedman's ONLY tax was a land value tax (essentially a wealth tax). I can imagine the unfettered economic growth without an income tax and capital tax/corporate tax.

  • Nardz||

    Ok, I'll venture a proposal:

    Ritual human sacrifice of the world's wealthiest person once every five years.

    For Gaia

  • Last of the Shitlords||

    I would prefer to use progtards as inventory for an organ harvesting operation.

  • Last of the Shitlords||

    I would prefer to use progtards as inventory for an organ harvesting operation.

  • Sevo||

    JFree|2.1.19 @ 2:19PM|#
    "Excellent comment."

    Bullshit which you endorse.

  • RabbitHead||

    The problem with donor money going to corrupt politicians is not with the donors.

  • awildseaking||

    With each passing day we inch closer towards a communist revolution. It's absurd how mainstream politicians talk about wealth confiscation and class jealousy. These people should be refused party endorsement and primaried.

  • a ab abc abcd abcde abcdef ahf||

    This bears a repost.

    I added up the Forbes 400 on 30 Jan 2019. It came to $2.891T. Not even three trillion dollars, not even one year of the Federal budget, or three years' deficit, even if you could confiscate all of it.

    And if you did confiscate all of it, it's not Scrooge McDuck swimming pools full of gold and jewelry, or even cash, or sitting in bank accounts. It's assets: things, property, not-cash. Investments mostly: stocks and bonds; some mansions, yachts, biz jets, Ferraris, and other toys. But all of it has to be sold to become the cash you can use to pay down the national debt or even eliminate the budget debt for a measly three years. $3T is peanuts and won't even put a dent in all the single-payer schemes.

    You couldn't convert it to cash anyway. You'd have to sell it, and the only people who could buy it, couldn't, because all their wealth has been confiscated.

    You couldn't nibble at it either with Lizzie Warren's 2% or 5% wealth tax, or Bernie Sanders' 77% inheritance tax. Not only does the basic problem remain, that it is not cash but assets which have to be sold, but the value isn't even known until you sell it, so you'd just be guessing what your stolen 2% or 5% or 77% is. With so many more sellers than buyers, the values would be depressed and you'd get pennies on the dollar, if you managed to sell much at all; everyone with the wealth to afford buying it would be scrambling to sell their own assets to pay their own wealth tax.

  • JFree||

    Forbes400 is one of the few instances of true investigative journalism that still remains. But they aren't looking at this - as a banker - or an insurance underwriter - or a macroeconomist at the Fed wondering what level of systemic debt will deter the next financial crisis - or a tax economist wondering how existing tax laws distort labor/product markets - or a corporate governance person re what % ownership gets the 'controlling owner' premium - or a foreign affairs person wondering what 'risks' to Americans assets or trade flows overseas might mean re potential wars/conflict.

    The wealth of the US is roughly $100 trillion. Viewing a tax on that in purely revenue terms is simply juvenile and ignorant. Balance sheets are balance sheets and income statements are income statements. It is the balance sheet that is more important than the income statement.

    The guys behind Warren's proposal obviously have agenda. But they also know how to study the distribution of that balance sheet. The top 16,000 (the 0.01%) own 12% of the wealth (up from roughly 3-4% in the 40-80's). The top 160,000 (the 0.1%) own 22% of the wealth (up from roughly 10% in the 40-80's). The top 1.6 M (the 1%) own 45% of the wealth (up from roughly 30% in the 40-80's). No one else matters anymore.

    So are the 99% commies? Or people who prefer the US as it was in the 40-80's? Let the games begin.

  • JFree||

    BTW - just in case you can't remember. In the 40-80's the US was fighting and resisting the commies. And we 'won'. Americans DIED doing that. And the ENTIRE peace dividend has accrued to - the 1%. Who have apparently turned that victory into what can be construed as a now global divide-and-conquer.

    There is very legitimate social disconnect here. Rich man's war - poor man's fight indeed.

  • Sevo||

    "The wealth of the US is roughly $100 trillion. Viewing a tax on that in purely revenue terms is simply juvenile and ignorant. Balance sheets are balance sheets and income statements are income statements. It is the balance sheet that is more important than the income statement."
    Lefty bullshit assertions are not arguments. Try again.

    "The guys behind Warren's proposal obviously have agenda. But they also know how to study the distribution of that balance sheet. The top 16,000 (the 0.01%) own 12% of the wealth (up from roughly 3-4% in the 40-80's). The top 160,000 (the 0.1%) own 22% of the wealth (up from roughly 10% in the 40-80's). The top 1.6 M (the 1%) own 45% of the wealth (up from roughly 30% in the 40-80's). No one else matters anymore."
    Lefty bullshit assertions are not arguments. Try again.

    "So are the 99% commies? Or people who prefer the US as it was in the 40-80's? Let the games begin."
    Did you have a point there, or did you start drinking early?

  • Sevo||

    (cont'd)

    "BTW - just in case you can't remember. In the 40-80's the US was fighting and resisting the commies. And we 'won'. Americans DIED doing that. And the ENTIRE peace dividend has accrued to - the 1%. Who have apparently turned that victory into what can be construed as a now global divide-and-conquer."
    Lefty bullshit assertions are not arguments. Try again.

    "There is very legitimate social disconnect here. Rich man's war - poor man's fight indeed."
    Lefty bullshit assertions are not arguments. Try again.
    If someone were as ignorantly left as you are, they would be nodding their head as if that pile of shit and claims made any sense.
    Hint: It doesn't. It's the politics of envy; exactly the same whine we've been getting from scumbags like you for years.
    Fuck off, slaver.

  • JFree||

    I knew this news would hit you and all your Weef Ling Puh relatives really hard. I hope your catatonia passes as quickly as your furballs. If your organ grinder lets you click on links, you might try looking at this. Yes I know the words will be way too long and complicated for you - but there are also pictures (well graphs) and squiggly lines.

  • Sevo||

    JFree|2.1.19 @ 7:59PM|#
    "I knew this news would hit you and all your Weef Ling Puh relatives really hard."
    If you ever had "news", it would come as a shock to many of us here. You have lefty bullshit claims and nothing more, scumbag.

    "I hope your catatonia passes as quickly as your furballs. If your organ grinder lets you click on links, you might try looking at this. Yes I know the words will be way too long and complicated for you - but there are also pictures (well graphs) and squiggly lines."
    I'll bet someone told you that was 'clever'. It isn't; they lied.
    Do you ever post anything that isn't lefty lies, bullshit, claims, or ever respond with anything other than the crap you posted a couple of hours ago?
    What a pathetic excuse for humanity; fuck off, slaver.

  • Sevo||

    BTW, I did waste time clicking on your link: One more lefty asshole whining about 'income inequality!!!!!'
    Fuck off, slaver. No one cares that you're a pathetic, whining failure.

  • vek||

    You DO know there is actually a perfectly logical series of explanations for why there are more super wealthy people in the USA right? And most of them aren't even related to stacking the deck or doing anything shifty.

    The population has gone up DRAMATICALLY. If 1% owns a certain chunk of annual income, and the population doubles, their share of NET WORTH will likely go up even more... Because people tend to not spend all their income. Somebody who makes 1000x the avg. worker will likely invest more than somebody who makes 500x the average worker. If you look at the share of income it has changed too, but not as dramatically as the net worth numbers imply.

    The rest of the world has become wealthier, and are consuming more... They largely consume products made by American businesses, even if they're manufactured overseas. This means baller American businessmen no longer have their fortunes MERELY tied to American incomes like they once did... Global income inequality has GONE DOWN over the decades.

    Not to mention other stuff like outsourcing our manufacturing (which consumers brought on themselves, like it or not), automation, longer life spans, etc etc etc. There are lots of NOT nefarious reasons.

  • JFree||

    Nevertheless -

    'fighting communism around the world' was what characterized the Cold War. Except for the relatively small window of the Cuban Missile Crisis where it could be construed as a direct threat.

    All the benefits of that victory - making the world safe for capitalism - have accrued to a small portion of Americans at the top (who make loud noises in their charity about how much they are helping mostly poor foreigners) and a bunch of fucking foreigners.

    Do not underestimate for one second how Warren's tax will appeal - precisely to the Trump/swing voters - if the economy even hiccups from here. And since the economy has mostly grown since the 90's via interest rate subsidies and asset bubbles - which further distort the field towards the wealthy - it would be wise to bet on continued hiccups.

    Libertarians - and by that I mean big-L - could benefit greatly from this. Because being able to leverage the education effort that Warren has to make re a wealth tax is huge. And L's (at least those who understand George or Churchill or Friedman or Nolan or Buckley) can separate that from the stuff that Warren can't separate (growth of govt, no change in other taxes).

    R's - even small-l's - can't. Because they are stuck with the cronyism that big donors expect.

  • vek||

    Dude, I have sympathy for the American worker... I am actually AGAINST all this outsourcing, and many other things slanted against the working class and middle class.

    Although I am not a big fan of laws decreeing it, I believe that business owners DO need to consider moral values, ethics, and have a sense of nationalism in the way they run their shit. I avoid buying things made in China like the plague for my business, even though it increases costs. Because I think it is immoral to support ruthless communist regimes. I'm even more hardcore about it in my personal life. Other than a few pieces of electronics (you just can't avoid it), I haven't hardly bought a single thing from China in probably going on 10 years. Even when I can't find American, European, Japanese, etc made, I'll snag something made in India/Mexico/etc instead of China.

    But there is still a right way and a wrong way to argue this shit. Distorting facts is never a right way. Perhaps some of these trends have benefited the capitalist class, but that is NOT the same thing as them going out of their way to screw people. I think there ARE a few cases of that, but most of the gap increase is related to other things IMO.

  • Brian||

    I don't understand all this hatred for rich people.

    We're people, too, you know.

    Normal people, just like you.

    If you prick us, do we not bleed? If you tickle us, do we not laugh?

    Stop the hate, people: just say "no".

  • esteve7||

    i said in an earlier post I had a FB friend who was at an event with a billionaire and was 'irrationally angry', and the comments were worse. Why don't you just give me one million dollars! you won't miss it and it would change my life!

    God these people.

    Leftists like to say they are motivated by compassion, but when you scratch the surface it is all greed and envy

  • Dillinger||

    the people they pray to never help anyone. they squander what would be goodwill.

  • Zeb||

    Why don't you just give me one million dollars! you won't miss it and it would change my life!

    I've definitely had that thought. But I know enough wealthy people to know that they really hate that. Because everyone is thinking it. Probably the most annoying thing about being rich is all the people who want you to give them stuff.

  • Brian||

    Because if I do that for 1000 people, I'm broke, and they're millionaires. That's why.

    People imagine that they're going to go after me and everyone's gonna get a check for $40K or something.

    It wouldn't even be $20.

  • Zeb||

    Yeah. I figured tha twas obvious.

    But come on, gimme a million dollars. I won't tell anyone, I promise!

  • vek||

    When I make it that last couple percent into the 1% proper... Nobody is getting shit from me. I'll just tell them it is a matter of policy, nothing personal. I've known people that were like that, even with their own family (as it should be), after getting hit up so much, and souring relationships by giving/loaning some people cash and not others etc. It's a wise policy.

  • CDRSchafer||

    There's an NFL player who had to completely cut off his friends and family (including his mother), because all they would do is pester him for money.

  • Unicorn Abattoir||

    Why don't you just give me one million dollars! you won't miss it and it would change my life!

    Look, cupcake. If I gave you that money, you'd be a 1%er like me, and being a leftist you'd be so consumed with self-hatred that you'd take your own life. Just thank me for saving you and get out of the way.

  • Nardz||

    If you could guarantee the suicide, I'd fully endorse that idea

  • vek||

    +1

  • mpercy||

    One of my favorite Liz Phair lyrics, I think of this every time I hear people bitching about people who have money:

    It's nice to be liked but it's better by far to get paid
    I know that most of the friends that I have don't really see it that way
    But if you can give 'em each one wish how much do you wanna bet?
    They'd which success for themselves and their friends
    And that would include lots of money

    I would surely include lots of money
    You've got to have shitloads of M-O-N-E-Y, money

  • Dillinger||

    >>>Also, of passing importance, it's probably unconstitutional.

    seems little is unconstitutional anymore.

  • NJ2AZ||

    i'm sure they have already prepared the necessary mental gymnastics to declare it a matter of 'commerce between the states' (insert eyeroll here)

  • Longtobefree||

    Yeah, right.
    Like gun control is unconstitutional
    Like asset forfeiture without a conviction is unconstitutional (with a conviction it is a fine)
    Like not allowing your business actions to follow your religious beliefs is unconstitutional
    Etc

  • esteve7||

    Evil, you missed that word. Her plan is Evil.

  • ||

    These people are exhausting.

  • Let freedom ring||

    Once you understand the US Individual Income Tax is not actually a tax on income per se, but rather an excise tax laid on the exploitation of federal privilege for private profit, whereby income is merely a measure of the exploitation, this problem disappears. But the libertarian/conservative establishment like Suderman refuses to embrace this distinction. Because this fundamental point is conceded, demagogues like Warren can continue to bash the rich without distinguishing between the free market rich and the crony capitalist rich.
    On Pete Hendrickson's website this month there is an article written by one of the working class non PhD activists on how even from the beginning the establishment media did not understand this distinction ( although ordinary Americans did). Also educated filers in Georgia have researched 50 State tax laws to show that State income taxes are not stand alone, but are entirely dependent on the federal income tax. IOW, if you do not owe federal income tax because you had no privileged taxable income, you also do not owe State income tax. Tens of thousands of educated filers receive full refunds of State and Federal income tax withholdings, including payroll taxes, by filing educated returns! See www.losthorizons.com

  • mpercy||

    "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. "

  • mpercy||

    I'd just like, for ONCE, one of these clowns like Warren explain what exactly is a "fair share". Let's define that concretely, then we can see who is and who is not paying their fair share.

  • Rich||

    "Oh, very well. A 'fair share' is what a 'reasonable person' would say it is."

  • I'm Not Sure||

    "I'd just like, for ONCE, one of these clowns like Warren explain what exactly is a "fair share". "

    How much do you have?

  • Aloysious||

    A reasonable share is defined as me taking as much of your stuff as I want.

  • Longtobefree||

    It is any proportional amount other than every one paying the same percentage.

  • mpercy||

    I figured it would be "100% of any income other people have that's more than what I make, and 0% on whatever I make".

  • Ken Shultz||

    Elizabeth Warren's wealth tax is about going after Trump in 2020. She's effectively campaigning on hurting Trump financially if she's elected in 2020. It's like Trump promising to jail Hillary Clinton. If you try to make sense of this policy, you're effectively carrying water for her. The question you should be asking isn't about whether we should soak the rich. She doesn't give a shit about that policy, really. It's about galvanizing the support of Democrats in the primaries, and it's about hitting Trump over the head with being wealthy in 2020. Trump is vulnerable to accusations of being a fat cat phony from the perspective of blue collar voters in the rust belt. Those are the voters that put him in the White House, and if Warren wins in 2020, it'll be because she wins them back.

  • creech||

    Ken, you have a way of cutting to the essentials of almost any issue raised in this forum. Keep up the good work.

  • Duelles||

    Direct taxation is a very questionable Contitution problem she will face. Back off and lose face ms Warren. Her immorality on this issue is beyond compare. A true idiot.

  • Zeb||

    There was some interesting discussion of the relative merits of income and wealth or inheritance taxes yesterday.
    But I neglected to think of or mention the biggest problem I have with income tax in general. It requires a big invasion of privacy. And with a wealth tax, that would be even worse. The government doesn't need to know all about everyone's financial situation.

  • ||

    Doesn't need to know and wants to know are two different things and the government wants the latter.

  • a ab abc abcd abcde abcdef ahf||

    The only tax I can think of which does not require an invasion of privacy is a land tax.

    I have had some fun thinking of a way to make it anonymous. All the government cares about is that it is paid. You could pay cash, get a receipt, and no one need know who paid it.

    There is the question of valuation. If it includes just the land, then how do you differentiate Manhattan from west Texas? If it includes improvements, how do you value them? Any on-site inspection invades privacy.

    I came up with self-valuation. You declare, with your anonymous cash tax payment, what you think the value is. The enforcement comes in that you are not allowed to collect any damages for a higher value. With court cases, that is fairly easy to enforce. With insurance, not so much, unless the government vets all insurance policies. Of course, the insurance company could collect premiums for a higher valuation, then when you try to collect, they compare it to the public self-asses value, and wag their finger while cutting you a much smaller check.

    Don't know how well it would work. But it was an interesting thought experiment.

  • mpercy||

    "The only tax I can think of which does not require an invasion of privacy is a land tax."

    A direct retail consumption tax. You can buy stuff, pay cash (which would include paying the tax in cash), walk out. The retail vendor may have some paperwork to keep up with but your privacy is intact. NO one ever has to know what you personally made in income, bought, or paid taxes on.

  • vek||

    Honestly, pretty much EVERY tax I can think of is better than an income tax in many ways.

    Sales tax is solid on almost all fronts. Property/land taxes are pretty legit too, with many variations on how they can be structured. HELL, even a Death Tax has advantages over income taxes because it rewards the person who actually BUILT a fortune, and not their potentially useless kids. If their kids aren't useless, they too will enjoy the advantage of not having income taxes while rebuilding the fortune after mom/dad kick the bucket.

    Income taxes are really the shittiest of all on basically all fronts.

  • Duelles||

    The tippy top spend money and invest and use their dollars in the private sector. Every place that does not get the "tippy top's" money will suffer. This woman is brain dead.

  • Duelles||

    The tippy top spend money and invest and use their dollars in the private sector. Every place that does not get the "tippy top's" money will suffer. This woman is brain dead.

  • Moridin||

    You can tell she crazed by the look in her eyes. Her policy proposals are just the icing on the cake.

  • MikeU||

    Is it just me, or does she look like she's trying to use the Force to just pull the cash out of someone's wallet?

  • Longtobefree||

    A federal property tax.
    Anyone else remember CA proposition 13?

  • NJ2AZ||

    i don't think these people understand how much of the 'wealth' held by the 'rich' is illusory.

    Someone made a comment on another article: Jeff Bezo's stake in amazon is valued at like $150B or whatever, but if he suddenly were forced to liquidate, there's no way it could be converted into $150B in cash.

    or to make it somewhat more relatable to the average joe, my house might be 'worth' $300k, but if suddenly everyone on my block were to try and sell, they'd all be worth much less.

    The way we value all things in a market at the value at which marginal things in that market trade is severely flawed.

  • Kevin Smith||

    Exactly, if Jeff Bezos suddenly tried to sell all of his Amazon stock, everyone else would probably sell too and the stock would tank

  • vek||

    Pshhh. Not even that.

    IMO, Amazon, Apple, most other tech companies, and to a far lesser degree THE WHOLE STOCK MARKET are wildly overvalued right now.

    So Bezos pays his tax based on $150 billion today... When Amazon stock tanks, and his net worth goes down to $80 billion, does he get to use his overpayment in the past to offset his new taxes?

    Bill Gates net worth peaked during the dot com bubble at $100 something billion... He's never hit that high again. Granted, he basically stopped trying to become wealthier, otherwise with even conservative investments he could probably be worth over $200 billion right now... But either way how does THAT shit work? Losing vast fortunes is very common.

  • Red Rocks White Privilege||

    It's telling that all these wealth tax proponents are targeting individual households rather than, say, the mass media and tech industries that provide them with campaign donations.

    Seems you could get a lot more out of a surtax on Hollywood box office and advertising receipts rather than the average billionaire.

  • Tonto||

    Taxes based on assets (real estate) have existed for years without major problems. And yes real estate values also fluctuate.

  • Unicorn Abattoir||

    have existed for years without major problems

    Yeah, about that...

  • Ron||

    all taxes started out as just taxes on teh most wealthy but some how they keep trickling down to everyone else when the wealthy learn how to make their money tax exempt

  • librich||

    The worst thing about all these wealth redistribution ideas is that the money goes to the government. That virtually guarantees it would be misspent. The government is currently a licensor of legitimate philanthropic organizations (tax-exempt). Instead of proposing new government taxes on the wealthy, why don't lefties propose levying a mandatory philanthropy donation? You'd have broad societal benefits and redistribution of wealth, but there would be a dramatically better outcome.

  • Rockabilly||

    the commies fear the right to keep and bear arms

  • J2Hess||

    Yes, there are good reasons to doubt that a wealth tax will be effective. Really, it would require international cooperation.

    The argument that it is unconstitutional is very weak. One of the pundits at the LA Times addressed that pretty effectively - the constitutional clause is interpreted as only applying to a head tax.

  • Don't look at me!||

    It's easy to avoid a head tax.
    Get married.

  • buybuydandavis||

    Nothing wrong with wealth tax. It's arguably better than income and capital gains taxes.

    Switzerland has one. They seem to have lots of good policies.

  • Philo||

    And many, many states have a much more radical form of asset tax, the property tax. As a residential appraiser in PA for years, I can attest to you that a 1% or 2% wealth tax on assets that generally earn 8%+ per year is quite mild compared to what rural and semi-rural home owners near the bottom of the asset owning class pay.
    Out here in the hinterlands, a 2% market decrease in market value is about as likely as a similar increase. In other words, housing prices have generally followed the national 2% inflation rate since they tumbled in '08-'09. Since we cannot do "spot assessments" and are limited to countywide re-assessments every generation or so. The inequities and inaccuracies are extreme because of this and, because they tend to go one way as regards wealth, it is those at the bottom who pay the most relative to their actual market value. As 3% per year of actual market value is not unusual among low end $100-$150k homes, and among those who own such homes, it is their home equity that represents the lions share or the only assets they have, a decade of flat prices could wipe out their 25% equity.
    As far as chasing away all the money currently "sheltered" here in the US, there is no argument that we will no longer be seen as great a capital haven, relative to the rest of the world as we were. This is why "soaking the rich" has its limits; do it enough and you end up with a "capital strike".

  • buybuydandavis||

    The one asset class that we actually tax is the one many peasants actually have. Funny how that works out.

  • librich||

    Prediction: Warren won't get much traction with the Demos for personality reasons. She's too brittle, too nasty. Trump was nasty, but he was able to balance it with his warped sense of humor. Likewise, I think Booker has a personality flaw which will get in his way. He's a storyteller and a dramatist, and he makes stuff up on the fly. Again, like Trump. But a lot of people accepted Trump's BS as part of the outrageous package. I don't believe Booker will get that kind of latitude. But he undoubtedly has a better shot than Warren, who is just plain unlikeable.

  • librich||

    In France, the estate tax appraisers would show up at your home unannounced, and walk through it, putting their own appraisal on all your physical possessions. It was against the law to resist them, and they insisted on having the latitude to do it unannounced--for obvious reasons. No kidding. That's how they did it.

  • vek||

    Good ol' France. :/

  • vek||

    Seriously purist libertarians... When will you pull your heads out of your asses and realize these people are probably just going to have to be thrown in camps... Before they do it to us. It really does seem to be nearing that point, so some of you should begin wrapping your heads around the idea.

    The sheer number of and power of people like this is such that they will not simply go peacefully into the night, even if political winds seem to begin to change against them. Look at all the corporate and deep state power they have brought out against a guy who is basically an uncouth 1990s moderate Democrat... IMAGINE what they'd love to do to people like you an I!

  • buybuydandavis||

    "Oh noes! The plutocrats might get taxed! Don't worry, Reason will save you!"

    Switzerland, one of the most safe and prosperous countries in the world, has a wealth tax. Funny how Suderman didn't mention that.

    A wealth tax is arguably more economically efficient than taxes on labor or capital gains. Shifts taxation toward unproductive uses of capital and away from more productive uses and labor.

  • vek||

    One of the problems with that though is that many low return types of investments are necessary investments... Silly little things like infrastructure, or other low profit, but highly stable investments. Discouraging things like that for chasing casino royale big payoff stuff will have pros and cons.

    If we were talking about completely restructuring our entire tax system from the ground up, I'd contemplate a modest wealth tax, probably one that hit EVERYBODY vs just a small number... But tacking it on on top of the rest of the madness we have... No thanks.

  • buybuydandavis||

    Did Suderman change the title on this? Feels like a different spin that originally.

  • dangfitz||

    2% on $50M... the current powerball is $204M. If you won, you'd either take the lump sum, $102M minus taxes, so about $60M. But if you take the annuity, you'd get $6.8M annually for 30 years. But you'd have an annuity valued at $204M. A 2% tax on that would be $4m. The top marginal rate is 37%. So, on that $6.8M, you'd pay $2.5M in income taxes per year. plus $4M in Warren's "wealth" tax, plus whatever your state tax rate is (I'm in Oregon, so that would be 9.9%, or $673K. $4M+$2.5M+673K is $7.173... so you'd pay $370K more than you'd get.

  • Dawg3||

    Liz is nothing but one stunt after another. I take nothing she says seriously. the woman is just oblivious to how ignorant and stupid she looks. I hope the progressives follow her right down the rabbit hole.

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