Today’s column concerns California’s cutting-edge wealth tax:
It’s possible, in principle, to impose a tax that loses money. Think of a 100 percent levy on capital gains. Yet California may have broken new ground by losing money through a tax that doesn’t yet exist. . . .
One point I didn’t get into: Social Security has a perverse effect on wealth inequality. It reduces the incentive and the ability of middle-income and low-income people to save money, and it represents a claim on future streams of income (albeit a negotiable and political claim) that isn’t included in measurements of inequality.
If you counted the present value of future Social Security payments as wealth, wealth inequality in the U.S. would look lower and so would its growth. Expanding Social Security in the way that Senators Bernie Sanders and Elizabeth Warren want to do would, on the other hand, make the wealth inequality statistics worse.