No. of Recommendations: 5
I get what you're saying, but I would want to see numbers. Because one number sticks in my head: about 1% of the population owns 90% of the wealth.We don't have wealth taxes in the U.S. We probably can't have wealth taxes at the federal level, absent an amendment to the Constitution. But we'll turn to that in a moment.
Looking at income taxes, the Trump tax cuts reduced government revenue by roughly $250-275 billion per year. The Bush tax cuts reduced government revenue by closer to $300 billion per year. Even if you repealed
both sets of tax cuts - a
massive increase in income taxes - you'd still generate less than $600 billion per year.
And a non-trivial chunk of both tax cuts applies to households that are not "the wealthy" - at least, as defined by the Biden Administration. About half the dollar value of both tax cuts went to households under the $400K income level that the administration is using as the line under which they will not entertain increases to income taxes. So the amount of extra revenue that you could raise by completely repealing both sets of tax cuts for people earning more than $400K would "only" be a bit less than $300 billion.
Compared to a deficit of $1.3 trillion. Not even a quarter of what you need.
What about a wealth tax? Well,
assuming you could get around the constitutional and logistic issues, you're still not going to get anywhere near enough. The Warren "Ultra-millionaire" wealth tax would "only" have raised about $200 billion per year - and that's before people start avoiding (not evading) the tax:
https://budgetmodel.wharton.upenn.edu/issues/2021/...Again - even combining the most ambitious wealth tax that's ever been released by a Senator with one of the largest income tax increases on the wealthy in modern economic times, you don't even get close to 40% of the deficit.
There's just not enough money there. The deficit is too big. If you're not going to cut spending, you have to raise taxes on people we don't regard as "rich."
And that's not even counting the other stuff that Democrats would really want to implement (like universal health care) with the proceeds of those kinds of taxes.
The reality is that you can't have the kind of robust social welfare state that virtually all European countries enjoy without having the kind of broad-based, somewhat regressive type of tax system (ie. a VAT) that imposes sizable tax burdens all the way down to the middle classes. Democrats are misleading their voters when they claim that there's a way to deliver their fiscal promises only by taxing "rich" folks.
