Wealth Taxes Have Always Been a Terrible Idea
A rash of new proposals by US states reveal the folly of tax-the-rich schemes, which are wasteful, damaging to the economy and almost impossible to execute fairly.
Higher taxes on luxuries like yachts is a more practical way to target the wealthy.
Photographer: Joe Raedle/Getty Images
There is a good reason we don’t tax wealth directly. Actually, there are many good reasons. But that’s not stopping some states from giving it a try. The best thing to be said about their efforts is that they probably won’t work. But it’s still a bad idea because even attempting to collect this tax will require resources states don’t have.
There are much more effective options for targeting wealthy people for tax revenue that are better for the economy. Some we’re already doing, such as state property taxes, federal capital gains taxes and estate taxes on inheritances. The last two are collected upon an event, when assets are sold or are transferred to another person.