Economy & Business

Senator Booker’s Terrible Tax Proposal

Senator Cory Booker (D-NJ) speaks as members of the Senate Judiciary Committee meet to vote on the nomination of judge Brett Kavanaugh to be a Supreme Court associate justice on Capitol Hill in Washington, September 28, 2018. (Jim Bourg/REUTERS)

Senator Cory Booker (D., N.J.) has a problem: a reputation for moderation that may hinder his chances in the Democratic presidential primaries. He is making frantic efforts to explode that old reputation. One day he rails against Jeff Sessions, with whom he used to co-sponsor legislation, as an enemy of civil rights. Another he insists, contrary to evidence, that he is breaking Senate rules to fight Brett Kavanaugh’s confirmation.

And now he’s proposing a sweeping program of wealth redistribution, one that would raise estate taxes to their highest level in decades in order to put the money in accounts for children from households that make up to five times the poverty level. (The higher the household income, the lower the yearly deposit.) Booker is touting this idea as a way of boosting saving — but on a national level, it can only reduce saving, since it diminishes the incentive to save.

If you’re rich, the estate tax is a reason to invest in economically unproductive estate planning or to spend the money rather than hand it on. Booker’s 65 percent rate — a significantly higher rate, by the way, than any advanced country levies — would be a much stronger reason to do either than today’s 40 percent rate. (The effective rate would be even higher than 65 percent because of other changes Booker proposes.) Because that rate would apply only to the very largest estates — for married couples, it would kick in at $100 million — it would affect the behavior of a small slice of the population, it is true; but it is the slice that does a disproportionate amount of the country’s saving. A lower rate of national saving will in the long run mean a smaller economy, with lower wages, than we would otherwise have had.

The estate tax is also widely disliked, much to the dismay of progressives. A 2017 poll found that 65 percent of the public wants to abolish the estate tax — and 76 percent wants to abolish it if it’s labeled the “death tax.” But then Booker isn’t playing to most Americans right now, just to left-wingers who hold disproportionate sway in the Democratic party. If only there were a way to redistribute their political influence.

The Editors comprise the senior editorial staff of the National Review magazine and website.

Most Popular

Culture

Jussie Smollett Jokes Declared Off-Limits

The Jussie Smollett story has been declared not fit for jokes. "It's a straight-up tragedy," declares the co-creator of a Comedy Central show, South Side, set in Chicago. Bashir Salahuddin, a former Jimmy Fallon writer, says “The whole situation is unfortunate. Particularly for the city, there’s bigger ... Read More
U.S.

What The 1619 Project Leaves Out

“The goal of The 1619 Project, a major initiative from The New York Times that this issue of the magazine inaugurates, is to reframe American history by considering what it would mean to regard 1619 as our nation’s birth year,” The New York Times Magazine editors declare. “Doing so requires us to place ... Read More
PC Culture

Courage Is the Cure for Political Correctness

This might come as some surprise to observers of our campus culture wars, but there was a time, not long ago, when the situation in American higher education was much worse. There a wave of vicious campus activism aimed at silencing heterodox speakers, and it was typically empowered by a comprehensive regime of ... Read More
Elections

Trump and the Black Vote

"Donald Trump is a racist, white supremacist, white nationalist. So are his supporters." Some version of that refrain is heard almost hourly somewhere in mainstream media. Democratic politicians seem to proclaim it more often than that. Listening only to the Left, you'd conclude that more than half a ... Read More