Bring on the wealth tax

Happy Thanksgiving to you all.

I marked the day last Saturday with my sisters and their families. So today I watched the Detroit Thanksgiving Parade, something I hadn’t done before because I was always on my way to visit family. I watched it on the internet – I did not get up early or brave the cold to watch it live.

For many years, perhaps a decade, the Ruth Ellis Center held a Thanksgiving feast the evening before, which was my regular volunteer night. The Board of Directors would bring in the food and serve it.

This year the director told me they would do something different, but didn’t tell me what. So I was a bit surprised when I got there last night and there were no steaming pans of turkey, ham, stuffing, sweet potatoes, green beans, and pies. There was also no crew there preparing anything else. The manager ordered a dozen pizzas – which I served. They were gone by the end of the evening.

Sometime during the evening I was given a flyer for the replacement event – the turkey and all the rest would be served all afternoon today – 1:00-6:00. This sounded like it could be a big deal. Since I wasn’t going to get turkey any other way today I decided I would go late in the afternoon and use that for my supper.

I got there about 4:30. Most of the small crowd had already gone. I didn’t see any leadership or board members. There wasn’t much ham or turkey left, though there was enough for me. Nobody was actively serving, so one youth asked me to serve him (what I normally do when I’m there). Before 5:00, even though they were supposedly going to be open for another hour, the staff started cleaning up. So I helped. Then went home.



Abigail Disney has a few things to say in favor of the proposed wealth tax. From what others have said she is a part of that Disney family.

Suppose one has a billion dollars. Suppose also one makes a conservative 6% return on investment (I thought conservative was more like 2%, but never mind). At 6% wealth will expand by $60 million a year. The wealth tax is proposed to be 2% or $20 million a year. That leaves an expansion of $40 million a year on top of the billion one already has.

There are two kinds of inequality – income inequality and wealth inequality. Income inequality is the obscene gulf between the size of the paychecks of those at the bottom and those at the top. Wealth inequality is the favorable tax treatment the wealthy enjoy for being wealthy, which allows their wealth to expand.

For example, the wealth of the 1% richest Americans has risen from $8.4 trillion in 1989 to $29.5 trillion in 2018, more than tripling. The wealth of the bottom half Americans went from $0.7 trillion to a minus $0.2 trillion in that same time. Disney asks:

Does this strike anyone as fair? More importantly, does this strike anyone as a good idea? Socially stable? The basis for a sustainable future?????

A reason for this massive shift is we have chosen to tax work differently than ownership. Owning things that rise in value get taxed at no higher than 20%. Income can get taxed at a much higher rate.

I'm told that those owners who enjoy that capital gains rate provide jobs and stimulate the economy, but how good at that can they possibly be if they wealth of the working people they are supposedly providing those jobs have gotten less wealthy not more so? If that dynamic worked, wouldn't we have seen improvement in the wealthy held more broadly by working Americans, rather than the cataclysmic plummet into negative numbers with which we are currently faced?

This reduced tax on ownership was because the South was afraid the North would abolish slavery by taxing it into oblivion. So to get the South to join the union the North had to forbid taxing ownership. Do we want to continue to lean on that legacy?

No, raising taxes won’t cause the rich to flee. They don’t have that many places to go. If they make their money here they should pay taxes here.

But no, you say, they will just cheat! Yes, they will cheat. Good lord of course they will cheat. But there's a little something called enforcement. We don't do much of it right now, in fact the IRS has been gutted. But that's like saying murder should be legal because you can't stop people from murdering each other. That is silly and you know it.
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I'd be all for a tax code that reflected the values we claim as a nation: that work is a good thing, that ownership is nice if it's deployed in a way that supports a thriving economy, and that when a small number of people own enough to completely reinvigorate all the aspects of the supposed American Dream that have decayed into near uselessness over the last 50 years, then Bernie, Elizabeth, I say go for it. Bring on the wealth tax. I will happily pay.