Elizabeth Warren wants a 2% wealth tax each year on every asset a rich person owns. The asset level for this tax starts out high, but once a new tax is introduced, it soon grows in scope. The federal income tax started out at 1% in 1913. Before long the annual wealth tax would likely be 5% and apply to all high earners.
That’s not the worst part. Since most people would fail to report all their assets on their tax filings, the IRS would probably require that affluent taxpayers file a financial statement along with their tax returns. Any omission on the statement would be a felony. If the IRS spotted anything amiss, they would be able to get a court order to go into your home and audit your assets. Fines and even jail would accrue to evaders of this insidious tax. The fact that plenty of people on the left think this is a great idea shows how little they understand freedom.
Ron Wyden, another liberal senator, wants to radically alter the capital gains tax. For example, if you buy a stock and one year later have a gain, you must pay a tax on the gain even though you haven’t sold the stock. Many investors would have to sell the stock in order to pay the tax. Talk about upsetting the financial applecart and creating chaos in the markets.
The dozen countries that have tried a wealth tax soon gave it up. Their citizens moved massive amounts of capital out of their countries and that began to harm their economies. Rich people aren’t stupid, they will bristle at this unfair tax and do what they can to thwart it. A wealth tax in America would prove to be highly counterproductive.