Most Democrats are pushing controversial proposals to tax the rich. They claim the money would help pay for many things, including:
- Health care for all
- A federal childcare program
- Larger tax credits for the poor and middle-class
- Climate change action
Look, these liberal tax-and-spend proposals sound great. But they don’t look so good when you crunch the numbers.
Taxing wealth is bad for the economy and entrepreneurism in general.
For example, Senator Elizabeth Warren is proposing a 2 percent tax on wealth above $50 million, and 3 percent on every dollar owned over $1 billion. Most Democratic candidates are proposing something similar.
It may not sound bad on the surface. But if it passes, the potential effects on a free market economy and the American Dream are chilling.
The fact is, most nations that have passed wealth taxes have abandoned them at some point down the road. But the support is there for having one in place.
And that’s why we should all be concerned.
If a wealth tax passes in the U.S., it could raise $2.75 trillion over a decade. That’s not that much money when you consider annual budget deficit projections are expected to top $1 trillion for the next 10 years. The wealth tax won’t even cover the budget, much less pay for huge social programs.
Plus, wealthy folks and their accountants always find ways to win. A wealth tax will likely just be a boon for accountants helping clients shelter assets.
Why do you think Apple went to Ireland?
Wealth taxes simply discourage successful people from gaining wealth. Businesses stop expanding. Jobs aren’t created. Companies move to low-tax havens.
Do we want that here?