I & I Editorial BoardIt took less time than we would have imagined, but proponents of the “billionaire wealth tax” have already given the game away.
Anyone who knows any history about taxes knows that the left always uses “tax the rich” as a cover to raise taxes on the middle class. Because, as Willy Sutton observed in another context, that’s where the money is.
But we were surprised to see Rep. Ro Khanna admit as much, even before he and his socialist pals get their coveted wealth tax on the boards.
“The tax should not stop at billionaires,” he wrote on his Substack. “The tax has to reach all fortunes $50 million and up.”
So why is the bill he sponsored along with Sen. Bernie Sanders called the “Make Billionaires Pay Their Fair Share Act”?
Because that’s how it always goes with new taxes.
Take the experience in Europe, where 14 countries tried a wealth tax, after which 11 ditched the idea because it didn’t raise much money.
The European wealth taxes that stayed rich-only — France, Sweden, Germany, Austria, Denmark — were repealed as revenue duds. The ones that survived did so by reaching the middle class … Norway’s kicks in at around $160,000 of net worth. The Netherlands taxes deemed returns on assets above roughly €57,000. Swiss cantons start in the low six figures. The slippery slope is quite literally the only way these things ‘work.’
But you don’t need to look abroad. Democrats have already been pushing wealth taxes that reach far more than “billionaires.” When Sen. Elizabeth Warren introduced her wealth tax in 2019, it kicked in at $50 million. That threshold has already been reduced because, while the number hasn’t changed in seven years, Bidenflation has reduced the inflation-adjusted threshold to $39 million.
Then there’s Joe Biden’s 2022 “Billionaire Minimum Income Tax,” which kicked in at $100 million.
The history of the U.S. income tax provides more concrete evidence of this trickle-down tax.
As we noted in this space in March (see “The Middle Class Will Pay For Washington’s ‘Millionaire Tax’”):
When the federal government first imposed an income tax in 1913, it was very much like a millionaire’s tax.
The law included a $3,000 personal exemption, which is equal to roughly $100,000 today. And even then, the rate was a mere 1% up to $20,000 (or $670,000 in today’s money). And the seven tax brackets topped out at 7% on incomes that in today’s dollars would exceed $17 million.
Just five years later, the personal exemption had been cut down to $1,000, the lowest bracket had been hiked to 6%, and there were 49 more tax brackets, with the top one set at 77%.
Then there’s the inconvenient truth that tax hikes on the “rich” always serve as political cover for tax hikes on the middle class.
Again, from our editorial:
When George H.W. Bush raised the top rate in 1990, he also raised taxes on things like beer, cigarettes, and gasoline. Bill Clinton and Joe Biden performed the same trick when they raised taxes on the rich. In contrast, when Ronald Reagan, George W. Bush, and Donald Trump cut the top tax rate, they also slashed taxes for the middle class.
Anyone who expects a “billionaire” wealth tax to be any different is living in fantasyland.
As an aside, we should point out that Rep. Khanna is a textbook socialist.
As the Washington Free Beacon exposed in a must-read investigative piece, “the progressive, Silicon Valley congressman and his family live a life of staggering luxury, fueled by dynastic wealth they did not earn and protected by the same thicket of trusts, anonymous corporations, and foundations that Khanna condemns.” (emphasis added)
That includes the family’s $6 million, 8,000-square-foot luxury home with a four-story elevator and his wife’s $190,000 Range Rover.
So, Khanna is surely a hypocrite of epic proportions. But at least he’s sort of honest about his “billionaire” tax.
— Written by the I&I Editorial Board
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“When Sen. Elizabeth Warren introduced her wealth tax in 2019, it kicked in at $50 million. That threshold has already been reduced because, while the number hasn’t changed in seven years, Bidenflation has reduced the inflation-adjusted threshold to $39 million.”
That’s not how inflation works. Inflation increases dollar amounts.
Perhaps you meant to say that $39 million in 2019 dollars is equal to $50 million in 2016 dollars.
Would it make you happier if we said that, had Warren introduced her bill today, she’d have to set the threshold at an inflation-adjusted $66.57 million? But she didn’t, so the threshold is now effectively much lower than advertised, and would continue to decrease because it’s not adjusted for inflation. Instead, we said that if she were to go back to 2019 and reintroduce her bill, she’d have to set the threshold at $39.37 million, because that’s the equivalent of $50 million in today’s dollars. Either way, it’s the same thing. By not adjusting the threshold for inflation, she’s effectively expanding the reach of her wealth tax. If you doubt our math, go here: https://www.bls.gov/data/inflation_calculator.htm
Now you’ve made it clear. In the article, you worded it very badly.
That’s a fair point.
When will any Democrat look to the revenue already collected and being spent on necessary items, and on so many unnecessary items, too, and reject the unnecessary to spend on more necessary items before mindlessly raising taxes?
Half of what my city and school district pays its revenue for, is unnecessary, redundant and should never have been authorized; so what do our Democrats do here and everywhere in the nation?
Raise taxes like nincompoops and voters keep voting the nincompoops into office.
The problem is why do the Dumocrats need all of everyone’s money? When you work, they tax your paycheck, when you buy something, you pay sales tax, when you own a car or boat or house you pay property tax. We are taxed from the federal the state the county the city. You have to pay taxes on things you already bought and paid taxes on. When you invest the money, you have already you pay capital gains tax. When you inherit your parents’ assets that they paid taxes on all their lives you have to pay taxes to take possession of their assets. If you add it all up, you only keep about 40%. Now if you earn a lot of money or inherit money that you already are taxed to death on, they want it. We started a revolution for a 3% tax on tea. The problem is not somebody no paying their fair share. The problem is huge bureaucracy created by leftist to support a massive part of our population that has no ambition, doesn’t work, and expect those that do to pay their way. The dumocrats get their votes by offering them more free stuff. They flooded our country with 3rd world migrants here illegally by offering them free stuff to get their illegal votes. These illegal 3rd world migrants are getting free houses free medical free phones free food and cash. These raises rent and the cost everything. So, while these 3rd world a-hole are flipping off the American people while staying in a $600 a night hotel and ordering take out talking on their free phone telling their relatives in Nicaragua how they have $6000 in food stamps. A widow whose husband worked and paid his taxes for 50 years is eating cat food and can’t pay her rent. Now these grifters want more to cover the cost of their humongous fraud and illegal voting scheme that is has gotten away from them and became a communist Islamic jihad to destroy the USA. All the while they were being used by our enemies to do this, but they don’t care because they have hundreds of millions of dollars in offshore accounts.