The Corner

Elections

Warren’s Wealth Tax Is Unethical

Sen. Elizabeth Warren speaks at the Presidential Gun Sense Forum in Des Moines, Iowa, August 10, 2019.

Senator Warren would impose a 2 percent annual tax on wealth above $50 million, and a 6 percent annual tax on wealth above $1 billion.

These numbers may seem small, but remember that they would be applied every year. With wealth taxes, small numbers have large effects. Applied to an asset yielding a steady return of 1.8 percent (roughly what you’d get from a 10-year Treasury note), a 6 percent wealth tax is the equivalent of a 333 percent income tax.

If Senator Warren’s wealth tax had been in effect since 1982, Warren Buffett’s 2018 net worth would have been $14.5 billion, rather than the $88.3 billion it actually was. Jeff Bezos would have had about one-third of his current wealth. Bill Gates’s wealth would have been 81 percent less.

Sound public policy requires balancing competing goods. Senator Warren’s proposed wealth tax would fail to achieve appropriate balance in several important ways. It would not balance the moral obligation of the rich to pay more with the need to avoid reducing the rich to piggybanks for the rest of society. Its purpose of “safeguarding democracy” against the threat of plutocracy is both wildly overblown and inappropriate. Its extreme effects are not even remotely connected to the scale of the problem she seeks to address.

And as I discuss in my latest Bloomberg column, it throws a fundamental balance in the U.S. system of government out of whack — that between the rights of the majority to govern and the rights of minority groups to protection from majoritarian excess.

As the public debate has made perfectly clear, the wealth tax would be levied to knock the rich down a peg. Because the aesthetics of a society in which a few have fabulous wealth are unappealing to some. Because many believe no one needs that much money, and want to use the tax code to take it.

This would be an abuse of the tax system. It would be an abuse of government power. The tax code shouldn’t be weaponized for the purpose of penalizing any minority. Not even the rich.

Check out my column for my full argument. Your comments, as always, are very welcome.

Michael R. Strain — Michael R. Strain is the director of economic-policy studies and the Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute.  

Most Popular

Why Trump’s Losing

President Trump pulled an inside straight to win in 2016, and now he needs another one. The good news for Trump is that his approval rating has stopped falling recently. The bad news is that it has stabilized in the low 40s. Election-watcher Harry Enten points out that no president since Harry Truman has won ... Read More

Why Trump’s Losing

President Trump pulled an inside straight to win in 2016, and now he needs another one. The good news for Trump is that his approval rating has stopped falling recently. The bad news is that it has stabilized in the low 40s. Election-watcher Harry Enten points out that no president since Harry Truman has won ... Read More
U.S.

A Stay-at-Home Mom on Her Reasons for Leaving Portland

While covering events (see here and here) in Portland, Ore., National Review writer Luther Abel sat down with Joanna -- a college-educated, stay-at-home mom and now Trump voter -- who feels it is no longer safe or healthy to live there. They discussed the change that has happened in the city politically, the ... Read More
U.S.

A Stay-at-Home Mom on Her Reasons for Leaving Portland

While covering events (see here and here) in Portland, Ore., National Review writer Luther Abel sat down with Joanna -- a college-educated, stay-at-home mom and now Trump voter -- who feels it is no longer safe or healthy to live there. They discussed the change that has happened in the city politically, the ... Read More
U.S.

Baby Please Come Back, Says Andrew Cuomo

Then-Mayor Mike Bloomberg famously described New York City in 2003 as a “luxury product,” and therefore priced accordingly. The price hasn’t changed, except to go up slightly — taxes, rents, everything. But few would argue that the product New York offers remains first-rate. The theaters are closed. The ... Read More
U.S.

Baby Please Come Back, Says Andrew Cuomo

Then-Mayor Mike Bloomberg famously described New York City in 2003 as a “luxury product,” and therefore priced accordingly. The price hasn’t changed, except to go up slightly — taxes, rents, everything. But few would argue that the product New York offers remains first-rate. The theaters are closed. The ... Read More
Law & the Courts

New York’s Lawless NRA Lawsuit

The latest bananas news from the banana republic that is the State of New York: The attorney general, a political enemy of the National Rifle Association, is seeking to have the advocacy organization legally dissolved. The pretext is financial corruption and self-dealing on the part of the NRA’s ... Read More
Law & the Courts

New York’s Lawless NRA Lawsuit

The latest bananas news from the banana republic that is the State of New York: The attorney general, a political enemy of the National Rifle Association, is seeking to have the advocacy organization legally dissolved. The pretext is financial corruption and self-dealing on the part of the NRA’s ... Read More
Elections

Joe Biden’s Authoritarian VP Finalist

Last year, Senator Kamala Harris may have become the first presidential candidate in history to laugh derisively at the idea that the Constitution limits what a president can do. When former Vice President Joe Biden said that her plan for gun control by executive fiat didn’t pass constitutional muster, she ... Read More
Elections

Joe Biden’s Authoritarian VP Finalist

Last year, Senator Kamala Harris may have become the first presidential candidate in history to laugh derisively at the idea that the Constitution limits what a president can do. When former Vice President Joe Biden said that her plan for gun control by executive fiat didn’t pass constitutional muster, she ... Read More