Taxing the rich: An increasingly popular idea
To the horror of Republicans, “soaking the rich” is clearly now a popular idea, said Eric Levitz in NYMag.com. A few weeks ago, Democratic wunderkind Rep. Alexandria Ocasio-Cortez (D-N.Y.) went on 60 Minutes and advocated a 70 percent top marginal tax rate on income above $10 million. Now presidential candidate Sen. Elizabeth Warren (D-Mass.) has proposed a 2 percent annual tax on fortunes above $50 million, and a 3 percent tax on assets above $1 billion. These proposals are surprisingly popular: A Fox News poll finds 70 percent support increasing taxes on incomes over $10 million, with just 24 percent opposed. Warren’s plan is “an inspiring idea whose time has come,” said Jared Bernstein in
The Washington Post. Her wealth tax would only affect 75,000 families, yet still raise a whopping $2.75 trillion over 10 years—which “speaks to the extent of wealth concentration in this country.”
It’s also a corrective of a “rigged” tax code that unfairly favors how the rich make most of their money—through interest, dividends, and capital gains—over income earned through work.
Warren’s plan “seems like good politics,” said Rick Newman in Yahoo.com— but it’ll “be hard to implement, and likely ineffective.” The super- rich often store wealth in hard-to-value illiquid assets, such as land, artwork, or privately held companies. How would the IRS assign a specific dollar value to such holdings—and keep billionaires from simply moving wealth overseas? Let’s call Warren’s plan what it really is, said Kevin Williamson in NationalReview.com— a revolutionarystyle “seizure of assets” from people who’ve been too successful. This sort of socialist liquidation of a nation’s upper class is what drove the French and Russian revolutions, Chavez’s Venezuela, and Stalin’s Russia. It never ends well.
But you don’t have to be a Marxist to see the wisdom in using taxation to prevent oligarchy, said Jamelle Bouie in The New York Times. Today, accumulated wealth exerts enormous influence over how we’re governed. In a 1785 letter to James Madison, Thomas Jefferson warned of the pernicious effect of concentrated wealth, saying “enormous inequality produc[es] so much misery to the bulk of mankind.” He advocated taxes on wealth that rise “in geometrical progression.” Seen through this lens, Warren’s and Ocasio-Cortez’s plans seem less revolutionary than “a course correction” to restore some balance to our economy and our democracy.