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.