Elizabeth Warren wealth tax: Unfair, counter-productive, growth-killing and un-American
Massachusetts Senator Elizabeth Warren, the Democratic candidate for President, has proposed the passage of a wealth tax. The tax would be 2% annually on net worth between $50 and $100 million, and 3% on net worth above $1 billion. This is a disastrous proposal for America. The proposed Warren tax on wealth is unfair, counter-productive, growth-killing and downright un-American.
Warren says that income inequality has worsened. She claims the gap between the richest Americans and the average Americans is widening. Warren points out that it is simply not fair that a few people have so much, while many people have so little. To correct this, she wants to impose a wealth tax, which, coupled with social programs, would re-distribute income
The Warren tax means families that have worked years, perhaps decades, to accumulate wealth, will be forced to pay millions in extra taxes each year. Their extra earned income is already taxed at 37%. Worse, their capital gains are taxed at 20%. Even after paying those taxes, Warren wants an additional wealth tax of at least $1 million and as much as $50 million annually, simply because the income-earner is wealthy.
Does a recent study support Warren’s wealth tax?
Warren’s proposal received more scrutiny when a recently released study examined the tax rate of the 400 highest income earners. The authors noted that for the first time in history when considering total taxes paid to all levels of government, the 400 highest income earners paid a lower tax rate than the average middle-class income earner.
Many Americans apparently think that is blatantly unfair. The highest income earners should pay a higher rate tax than average Americans, most reasoned. That explains our “progressive” tax system, which allegedly ensures that the tax rate increases as income increases.
The middle class does pay a slightly higher rate than the top 400 income earners only when all government tax liability is considered. That includes all federal, state and local taxes. The reason? Most state income tax rates are progressive. But the social security tax, property taxes and sales taxes are regressive. That means the tax rate actually declines as…