Wealth Taxes Are a Dying Breed

For those curious to learn more about wealth taxes, Brad DeLong recommends a primer written a few months ago over at Equitable Growth. It’s a good introduction, but in the end the most important takeaway is probably this:

Most countries have given up on wealth taxes because the game wasn’t worth the candle. There are lots of intricacies to a wealth tax, and in the end it amounted to only about 1 percent of total tax revenues in most countries (with Switzerland as a bit of an outlier). In the United States, total tax receipts for all levels of government come to roughly $5 trillion, so 1 percent would amount to $50 billion per year.

In round numbers, you could get the same amount of revenue by creating a new tax bracket at $1 million and increasing the top tax rate from 39 percent to 42 percent. There may be advantages to a wealth tax even if it raises the same amount as a millionaire-bracket income tax, but on the other hand the increased income tax is very simple, very well-understood, hits pretty much the same people, and is unquestionably constitutional. Given all that, a wealth tax would probably need to have some pretty convincing benefits to be worth the effort of creating it.

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

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