Why a Wealth Tax Won’t Raise Revenues or Reduce Inequality

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Wealth is hard to measure and easy to hide.

NRPLUS MEMBER ARTICLE C alls for a wealth tax are rising across North America. Bernie Sanders and Elizabeth Warren each endorsed such a tax when running for the Democratic nomination. Its political attraction plays on the populist fantasy that taxes can painlessly be shifted to rich people and corporations. The temptation to adopt a wealth tax will grow in the aftermath of record budget deficits resulting from the pandemic-induced recession.

The political receptivity to a wealth tax is reinforced by a growing intellectual hostility to wealth inequality, most evident in Thomas Piketty’s Capital in the Twenty-First Century. The French economist argues that inequality will widen …

Philip Cross is a senior fellow at the Macdonald-Laurier Institute and author of An Entrepreneurial Canada? Understanding Canada’s Chronic Lack of Innovation and How We Can Fix It.