Senator Elizabeth Warren, along with Senator Bernie Sanders, just unveiled her latest version of a wealth tax. The idea has superficial appeal—the rich can easily afford a tax of 2%-3% a year on their wealth!
But, as this segment of What’s Ahead explains, the Warren wealth tax would end up harming just about everyone, except, of course, the political class.
It would be a chilling invasion of privacy, as the exaction applies to literally everything you own, including retirement assets. The IRS would have the right to examine your home to make sure you’re not hiding anything, especially items like jewelry.
No wonder Warren’s bill calls for a massive expansion of the IRS.
The tax would be an administrative nightmare precisely because it involves putting a value each year on all of your property, including artwork, photographs, jewelry, furniture and even your household pets. The whole exercise guarantees endless litigation.
Advocates like Warren have the cartoonish image that the rich sit on mountains of cash, whereas most wealth consists of such assets as a house, a business or shares of stock. To pay such a tax each year would mean a forced sale, which would depress prices.
With the Warren tax, Washington politicians would siphon off almost $4 trillion in investment capital over the next decade, seriously hurting economic growth.
Steve Forbes is Chairman and Editor-in-Chief of Forbes Media. Steve’s newest project is the podcast “What’s Ahead,” where he engages the world’s top newsmakers,
…
Steve Forbes is Chairman and Editor-in-Chief of Forbes Media. Steve’s newest project is the podcast “What’s Ahead,” where he engages the world’s top newsmakers, politicians and pioneers in business and economics in honest conversations meant to challenge traditional conventions as well as featuring Steve’s signature views on the intersection of society, economic and policy. Steve helped create the recently released and highly acclaimed public television documentary, In Money We Trust?, which was produced under the auspices of Maryland Public television. The film was inspired by the book he co-authored, Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It. Steve’s latest book is Reviving America: How Repealing Obamacare, Replacing the Tax Code and Reforming The Fed will Restore Hope and Prosperity co-authored by Elizabeth Ames (McGraw-Hill Professional). Steve writes editorials for each issue of Forbes under the heading of “Fact and Comment.” A widely respected economic prognosticator, he is the only writer to have won the highly prestigious Crystal Owl Award four times. The prize was formerly given by U.S. Steel Corporation to the financial journalist whose economic forecasts for the coming year proved most accurate. In both 1996 and 2000, Steve campaigned vigorously for the Republican nomination for the Presidency. Key to his platform were a flat tax, medical savings accounts, a new Social Security system for working Americans, parental choice of schools for their children, term limits and a strong national defense. Steve continues to energetically promote this agenda.