Wealth Tax

See: Progressive Tax. See: Windfall Tax.

Tax the wealthy at a higher rate than the poor. That's the ethos. And it made perfect sense when the wealthy were in England as Lords on Lordesses or whatever they're called across the pond. The wealthy did nothing and only benefitted in society by dint of inheritance, the highest margin business in the world.

But in today's world, one has to ask why we are taxing a 75-hour-a-week plumbing parts distributor making 200 grand a year at such a higher rate than we tax the union toll booth $5 bridge fare taker. Are we punishing wealth too much? Will the motivated get...less motivated?

Well, maybe we sorta saw this issue in the Trump election. Unclear. But the whole notion of a tax on wealth versus earnings is now a Thing in America. That is, in a given year, a neurologist might make $500k in taxable ordinary income. She'll pay something like $220k in taxes if she lives in a blue state. That's a tax on her earnings.

But wealth is different. The CEO of an insurance company might have $100 million in invested securities which pay a 2% dividend. She'll make $2 million a year in dividends, pay taxes of about $600k and net, say, $1.4 million from that throw. She pays herself a dollar a year to be CEO, because she just doesn't need the salary (which would be taxed at the much higher ordinary income rates than the dividends).

She has plenty of cash to live her life from the throw of the dividends. So she lets her investments sit and percolate, going up 5-7-10 percent a year over time. Something like that. Easy money.

Should we as a society then also tax her on her wealth? That is, should we tax, say, 2% a year on the $100 million she has in savings? What would that do to her charitable interests? If it were you, would you be less charitable if you had to give the $2 mil a year you normally give away to idiot politicians who are going to just waste a huge part of that money on one form or another of a union tollbooth taker with really up-to-date Facebook pages?

Maybe. Lotta maybes here. No answers.