Apparently, the editors of the Wall Street Journal have noticed the same op-eds I have. Here’s their response:
Nineteen uberwealthy Americans posted an open letter Monday calling on “all candidates for President†to support a “moderate†wealth tax. Signatories include the investor George Soros, Berkshire Hathaway scion Molly Munger, Mickey Mouse heiress Abigail Disney, Facebook co-founder Chris Hughes, and a couple of Hyatt Hotel progeny from the Pritzker family.
“America has a moral, ethical and economic responsibility to tax our wealth more,†they say. Revenue squeezed from the top 0.1% could fund “smart investments,†such as “clean energy innovation,†“infrastructure modernization,†“student loan debt relief,†and “public health solutions.†A wealth tax could safeguard democracy, too, since countries with high economic inequality are more likely to “become plutocratic.â€
The letter brushes by the arguments against a wealth tax, calling them “mostly technical and often overstated.†Would courts find it unconstitutional? How would assets like Picassos be valued? Why has Europe largely abandoned this kind of taxation? Doesn’t it diminish the incentive to save and invest? What’s to keep a wealth tax from expanding, like the income tax did, to cover more and more Americans?
Instead of seriously grappling with these objections, the letter tries to sweep readers along in sheer patriotic fervor. The rich “should be proud to pay a bit more,†the authors say. “Taking on this tax is the least we can do to strengthen the country we love.â€
Well, what’s stopping them? If billionaires see themselves as a threat to “the stability and integrity of our republic,†they could cease being billionaires any day. If retiring student debt is vital, they could put out a call to graduates and start paying off loans. If the climate is a priority, they could fund a green Manhattan Project.
My response was a bit more sophisticated than that but it’s a start.
It has been explained to me that billionaires will never voluntarily pay more taxes because they “don’t want to be chumps”. I’m skeptical of the notion that social pressure will motivate them. It’s contrary to my personal experience of the ultra-wealthy. Besides it would require that tax returns be public record. Not manipulating the tax code for private benefit would require Congressmen to disarm voluntarily, freely relinquishing one of Congress’s greatest powers. For those reasons I doubt it can happen.
“It has been explained to me that billionaires will never voluntarily pay more taxes”
Do we have a history of individuals voluntarily paying more taxes? Not in any significant way. Do we have a history of people giving up their government benefits like Medicare because they want smaller government? Not in any significant way.
Steve
We also do not have a history of people asking to have their taxes increased. There seems to be a cottage industry of it now. That doesn’t seem to be backed by relevant action on their part. Your explanation for that is they need social pressure, in your words they don’t want to be chumps. I don’t think that’s credible.
For me a more credible explanation is that they’re more interested in other people being forced to pay more taxes while they themselves escape paying more. That’s certainly consistent with their history.
Whoa! Where did I ever say social pressure? The laws need to be changed. No one will pay more taxes or give up Medicare because they are afraid someone will roll their eyes at them, they will do it because the law was changed.
Steve
The evidence says exactly the opposite. Effective tax rates have been enormously constant over a very long period. Basically, there’s a ceiling beyond which Americans will not pay taxes except during a national emergency like World War II. Whatever they say the “moral equivalent of war” is not war.
An overall ceiling. Many of the ultra wealthy pay well below expected rates. LCose those loopholes. Fund the IRS so that they can go after rich people, not just those receiving the EITC.
Steve