Rebecca Quick of CNBC stepped in to challenge Democratic Senator Elizabeth Warren’s proposed wealth tax this week. The senator had previously suggested a tax rate of up to 6 percent for those with a net worth of at least one billion dollars.
“The idea of just a wealth tax in itself, really upends things,” Quick said to Warren. “We can say that we’re going to only go after $50 million and above, but we all know that income taxes started out that way too, and it’s gotten to be a bigger and bigger part of everybody’s number. And the idea of an unrealized gain that I never see being taxed is anathema. That just doesn’t at all seem fair in any way, shape, or form.”
Quick’s opinion holds a lot of truth. It is already unreasonable to be taxed on money that has not actually been spent. Not to mention the fact that this wealth tax will even affect those with net worths of less than $50 million. A wealth tax like this could easily be manipulated to target specific individuals and groups. It is too easy for such policies to go off the rails, leading to even higher taxes that will affect the middle class.
Furthermore, even if a wealth tax is limited to those with net worths of $50 million or greater, it is likely that the tax rate will continue to grow in the future. As it stands, this wealth tax does nothing to solve America’s economic issues. It simply shifts the burden of financial responsibility from the wealthy to the less wealthy.
In response to Quick’s statements, Warren said: “The idea that you say, ‘Oh, I’m worried that billionaires won’t be able to be represented in Congress and taxes will get out of hand,’ give me a break. It’s the billionaires who just got the tax cut from Donald Trump that turned out to be, what? Nearly $3 trillion. Most of that money went to millionaires and billionaires. It made the tax system even worse.”
The reality is that a wealth tax does not address the unequal wealth distribution in America, and would likely only cause even more economic divides. Warren’s wealth tax does nothing to actually address the reasons why America is facing economic disparity, but instead only serves to shift the weight of financial responsibility from those who can afford it to those who cannot.
Perhaps before introducing laws that will only hurt those who can least afford it, Warren should revisit how the wealthy can be meaningfully taxed in ways that would not affect the middle class.