Elizabeth Warren’s Phony Wealth Tax: A Better Simple Solution

Looking at the Democratic candidates, none of whom really gets me quite enthused, I see that Massachusetts own Elizabeth Warren is among those considered contenders. Her great proposal is – as she puts it – to have people with over 50 million in assets to pay two cents. That’s all she’s asking, two cents on the dollar for every dollar over 50 million in wealth. Well that’s not exactly correct for if you own more than a billion dollars then for every dollar over a billion it is three cents.

Two or three cents doesn’t sound like much until you start attaching it to large amounts of dollars., then it becomes quite significant. One person discussing the wealth tax noted: “Facebook CEO Mark Zuckerberg is worth about $57 billion. A 3 percent tax on that fortune would cost $1.7 billion in the first year, . . .” So it all adds up as you can see.

I don’t have any problem with people who have over 50 million dollars in assets paying a greater share of the taxes. But I assume most of them have paid taxes on the money they accrued over the years so turning around and saying because you accrued more than a certain number of dollars we are going to start taking some away from you seems a little bit unfair. Not that unfair really is a measure of anything when you start with the proposition that for many people life is unfair.

The real problem that I have with wealth taxes is figuring our how much wealth a person possesses. With Zuckerberg the guy doing his estimate based it on his stock holdings. But doesn’t Zuckerberg own a good part of a state that is situated in the middle of the Pacific Ocean. What is that worth? What is all his art work worth? Does he have to disclose all that he owns? Will federal auditors come to his homes and assess the value of everything in there to figure out his taxes?

What about Jeffrey who owns the island in the Caribbean?  What value do we put on that? What about all the other things he may or may not own.? Who is going to track all this stuff down? Will they find all the bank accounts hidden off shore in the names of other entities that Jeffrey owns?

Then there’s the woman living modestly in a small house in the western part of Massachusetts who owns two painting by Leonardo da Vinci that have been in her family for decades. The last painting by da Vinci, Salvatore Mundi, sold for 460 million a couple of years ago.  Who is going to price these paintings to figure out her wealth tax. Assume each is given a value of 525 million which is considered low. She has to come up with 20 million dollars to pay her taxes which she doesn’t have. Will one of her paintings be confiscated?

The wealth tax causes enormous problems in determining the value of any asset outside of stock and real estate and even in determining who owns what? The idea of such is outlandish but advocated because many of her other ideas need an outlandish proposal in order to pretend there is a way to pay for them.

There is a more simple approach. It has been battered down through the years but it provides the most equitable manner of taxing people. It is the progressive income tax based on a persons total income including capital gains. The higher the income the higher the tax with no exceptions. It’s not difficult. What is difficult is to figure out why no one is advocating it.

 

8 thoughts on “Elizabeth Warren’s Phony Wealth Tax: A Better Simple Solution

  1. Your last sentence is right on the money – why is anyone advocating such a thing?

    I doubt that a single Dem candidate really believes the tripe that they are spouting out, like some kind of perverted snake oil salesmen.

    But there they are, seeing if anyone will buy their particular type of snake oil.

    In Warren’s case – I refuse to believe anyone whose head shakes so much when she spouts that it looks like it’s going to fly off like a helicopter.

  2. I don’t see the justice in permitting Jeffrey Epstein to pay less in taxes. The same is true of Bill and Hillary Clinton and our esteemed president, Donald Trump. I could go on, but you get the idea.

    1. I understand that Epstein is dead by suicide. What a shame. So not only Hillary is a murderer. Can you imagine the dope he had on some big names? How long would it take them to pool a few million to have Eppie whacked? The answer is ‘no time’.

  3. When Reagan was president his spending was one trillion dollars. We had a booming economy, a strong military and won the cold war. He reduced the top rate of tax from 70% to 28%. His policies doubled the income for the Federal coffers from 400 billion to 800 billion Today we are spending 4.5 trillion dollars. The State has grown much too large. We run a trillion dollar deficit annually half of which is interest on the debt that Obama and Bush ran up waging their endless foreign wars. Tulsi Gabbard is right about this issue. Reagan correctly diagnosed the disease. He said government wasn’t the solution to what ails us. Government was the problem. 2. Rand Paul’s tax proposal is interesting. A 14% business tax on all sales and a flat 10% income tax.. The IRS could be reduced 90%. 3.The studies by the Finland climate scientists which are confirmed by Japanese ones show man’s contribution to global warming is less than one percent, Essentially negligible. PBS had a great show about the Inner Planets on NOVA. The scientists at Cal Tech and NASA said that as the sun ages it will grow larger and become hotter rendering the earth uninhabitable in about a billion years. AOC has said the earth will end in 12 years if we don’t address climate change. Who do you side with? Those at NASA or the bartender?

    1. “The studies by the Finland climate scientists which are confirmed by Japanese ones show man’s contribution to global warming is less than one percent, Essentially negligible. ”

      I think I read that the climate scientists (is that a malapropism or what?) in The Republic of Chad discovered that Silence is Cheap. You see, Bill, silence is golden, gold is money, money is talk and talk is cheap. Therefore, Silence is Cheap. Stop reading fairy tales and take the tooth out from under your pillow.

      So, I think my ideas are good. I think I’m right and you are wrong about The Tooth Fairy. By the way, that was Francis Dolarhyde’s nickname. He had yellow eyes.

  4. wa-llahi! A flat tax punishes the poor. That’s the kind of tax they have in Guatemala, Honduras, and, El Salvador. Good thinking Bill.

    1. Khalid, I submit for your consideration Thomas Sowell’s “Cosmic Justice” which expounds upon the illusion of State-imposed equality of outcome, among other stuff.

      In my world view, if you tax a man making 20 grand ten percent and a man making 200 grand ten percent and a man making 20 million ten percent (a flat tax), you are not PUNISHING anyone.

      But, I guess it depends on what your definitions of punish, fair, and justice are. I prefer Thomas Sowell’s comprehension of social-justice, and Milton Friedman’s expositions (written and verbal) on economics, to the whiny nostrums of socialism. “I was born in a housing project in America: Give me stuff.” No! America will give you the opportunity to excel, just as two thirds of multi-millionaires rose up from poverty or middle class to the top. Only in America. We do our best to remove structural impediments to health, wealth and well-being, but we don’t guarantee a pay day nor a life without care, loss, bumps, bruises. We can’t.

      Want to PUNISH the POOR? Impose stifling Socialism, Big-State-ism, Marxist-Leninism on them.

      So, I think my ideas are good. I think I’m right and you are wrong about America.

  5. Matt:

    Your proposal is a little different than the four brackets we got.

    INTRO: Business, money and math are my weak suits. I’ve never been able to put two nickels together to make a dime. I’ve led a life mostly uninterested in business, management or money, and that’s why I have no money. But my brain’s been free to think about other stuff.

    I’ve always been interested in ideas. I like batting ideas around. I like variations on a theme, dissenting voices, the contrapuntal theme, disharmony, atonality, abstraction, expressionism, history, science, fiction . . .it’s all music to my ears.

    TAXES: The less we tax, the more we leave money in private citizens hands, the better off we Americans are. We are a free people. “He who governs least, governs best.” Governments are necessary, but must be tightly reigned in, lest state power be abused, and individual rights be threatened or compromised.

    The progressive tax generally punishes those who work harder, longer, better, more successfully, more creatively and who contribute more to society. Yes, some sit on their wealth . . .but it is theirs . . . .but most know best how to use it . . . .200 billionaires have freely pledged to give half their wealth away to charity . . . one Irish-American billionaire gave 99% of his wealth away to charity.

    The progressive tax like the wealth tax takes from those who did best (or whose family did best) or who do well and gives to Fed, State, Local bureaucrats who generally do less well.

    Why punish the most successful?

    I propose a REGRESSIVE TAX, which would start above the poverty level, so those at the bottom would pay more proportionately, and those at the top who have made more of their money , contributed more to society, and made more of their life, generally, would pay less. The REGRESSIVE TAX would incentivize folks to move up and make more.

    LEAVE THE CASH IN THE HANDS OF THOSE WHO HAVE DONE THE MOST WITH IT.

    Free people create, invent, progress.

    Bureaucrats preserve and protect, but also burden, impede, slow down with red tape. That’s their job: to make society regular, to regulate.

    Free people make societies great, not regular.Think of the Internet, Amazon, FedEx, Art, Music, Literature. . . .mostly the work of the free, although oftentimes via the largesse of patrons.

    3. MY REAL PROPOSAL: One flat, fair income tax on everyone, filled out on a postcard; one flat fair business tax on all businesses, filled out on a postcard. Eliminate all Tax Lawyers, all Tax Accountants, all Tax Courts. Make the IRS miniscule. Think of the savings!

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