Senator Warren's Pernicious Wealth Tax

I am rich.

No, I do not have multiple residences, a yacht, a wine cave, or any of the storied trappings of wealth.  And I certainly don't feel "rich."

I am simply retired, and over a lifetime of working have accumulated assets that are meant to support me and my spouse in our retirement years.  In my view, this is the responsible thing to do.  We want to avoid being a burden on family, or relying on benevolent institutions or government assistance to sustain us.  But some Democrat politicians, most notably Sen. Elizabeth Warren, might call me "rich" and take future steps to confiscate the fruits of my labor and my sacrifice during my working years.

Photo by Gage Skidmore

If wealth-tax propositions raise a legitimate question of "justice" in wealth, we should note at the outset that, as with everything else, there is undeserved wealth in the world.  Dishonesty exists everywhere, the world we live in is unpredictable, and life's outcomes are never perfect.  But far more commonly, honest wealth is the consequence of personal sacrifice; relentless discipline and diligence; a willingness to take risks; the life-long exercise of moderation and frugality; and tireless hard work over many years.  These are attributes that should be cultivated in our society.  They have through history been the basis for our country's exceptional wealth creation, benefitting all of its citizens.  Instead, a wealth tax punishes these very attributes and rewards their omission.

Warren dishonestly deflects this reality and disparages what she calls "ultra-wealth," targeting the "top 0.1%."  But such distinctions are arbitrary and, ultimately, transitory.  Warren's wealth tax proposal presents a pure caricature of the wealthy (maybe exemplified by the Monopoly tycoon icon?).  It is a seductive (and divisive) fiction to imply that the "wealthy" are greedy and dismissive of the less-wealthy, and have come to possess wealth through nefarious or unscrupulous means.  Where corruption exists, prosecution is the proper remedy.  And in this regard, it is beyond ironic that some of Warren's wealth was obtained through her own career deceptions.

Furthering the insult, Warren delegitimizes our values, devalues our work, and inflicts guilt by telling us "there is nobody in this country who got rich on his own" (later echoed by Obama saying "you didn't build that" and reiterated by Warren in the current election cycle):

But here's the deal.  I guarantee you built it at least in part using workers all of us help pay to educate. Yeah. You built it at least in part, getting your goods to market on roads and bridges all of us helped pay to build. Yep. You built it at least in part, protected by police and firefighters all of us help pay their salaries.

It is certainly true, and a genuine blessing, that we all enjoy the legacies of prior generations, just as we wish the same for our children and their children.  But every one of us has that benefit, nevertheless.  Some of us, in exercising the values that made this country great, are going to realize success from that shared starting point, and are justly entitled to reap and keep the rewards of our efforts.

This is a crucial point, and a basic distinction between capitalism and socialism.  Warren looks across this country and sees "too many" individuals holding "too much" of the country's wealth.  She especially despises inherited wealth.  To put it bluntly, Warren is telling us that we do not meet her standard of justice and is seeking to impose her morality on the rest of us.  While one can wonder how Warren became privileged to make such assessments, her view is precisely aligned with contemporary progressive economics.  If you value a society having purely communal property, then a wealth tax is a pathway to that goal.

But if you prefer a society that rejects Marxist thinking and instead values liberty and individual sovereignty, you understand the vital importance of private property.  Consider an artist who spends several months' time producing a painting, only to have it stolen.  Because the theft denies the artist personal gain from the work's exhibition or sale, the artist's life may as well have been shortened by the time she spent producing it.  This essential linkage -- the outpouring of our finite lifetimes into the products of our labor -- is the very nature of, and justification for, "property."  The obligation of a legitimate government to protect our lives and our liberty inescapably demands the protection of our private property -- wealth included.  Our wealth is not simply our property.  Our wealth is our lives.

Understood as theft, the confiscatory nature of a wealth tax is its worst feature.  Each year, you hand over to the government a share of your savings (under Warren's plan, 2% of all of your assets, which can mean liquidation to comply).  You can only watch as your hard-earned capital shrinks over time.  Your life's product is steadily appropriated while Warren and unelected bureaucrats get to play with your money.

While I personally (disclosure) don't qualify under Warren's opening limits on the scope and reach of a wealth tax, history is instructive.  The federal income tax also was promised to apply only to the "wealthiest" among us.  How things change.  Today, if you are an ordinary working, contributing member of society, you are taxed on what you earn, and not trivially so.  The income tax has been perverted from a source of federal funding to a tool for income redistribution, one that "has evolved into an enormously complex social document . . . betraying the original design of its creators." (See Cato p.223)  Its creation a century ago shares uncanny parallels with Warren's wealth tax proposal of today.  Leveling the "ultra-wealthy" is Warren's stated purpose, but only a fool would doubt that a wealth tax will eventually reach lower levels of "wealth."

Warren disguises the theft that a wealth tax represents by asserting that justice demands it.  But to say that justice is achieved by handing our wealth over to the likes of Elizabeth Warren is preposterous.  There can be only one reason to support such a proposition:  Ignorance.

I am rich.

No, I do not have multiple residences, a yacht, a wine cave, or any of the storied trappings of wealth.  And I certainly don't feel "rich."

I am simply retired, and over a lifetime of working have accumulated assets that are meant to support me and my spouse in our retirement years.  In my view, this is the responsible thing to do.  We want to avoid being a burden on family, or relying on benevolent institutions or government assistance to sustain us.  But some Democrat politicians, most notably Sen. Elizabeth Warren, might call me "rich" and take future steps to confiscate the fruits of my labor and my sacrifice during my working years.

Photo by Gage Skidmore

If wealth-tax propositions raise a legitimate question of "justice" in wealth, we should note at the outset that, as with everything else, there is undeserved wealth in the world.  Dishonesty exists everywhere, the world we live in is unpredictable, and life's outcomes are never perfect.  But far more commonly, honest wealth is the consequence of personal sacrifice; relentless discipline and diligence; a willingness to take risks; the life-long exercise of moderation and frugality; and tireless hard work over many years.  These are attributes that should be cultivated in our society.  They have through history been the basis for our country's exceptional wealth creation, benefitting all of its citizens.  Instead, a wealth tax punishes these very attributes and rewards their omission.

Warren dishonestly deflects this reality and disparages what she calls "ultra-wealth," targeting the "top 0.1%."  But such distinctions are arbitrary and, ultimately, transitory.  Warren's wealth tax proposal presents a pure caricature of the wealthy (maybe exemplified by the Monopoly tycoon icon?).  It is a seductive (and divisive) fiction to imply that the "wealthy" are greedy and dismissive of the less-wealthy, and have come to possess wealth through nefarious or unscrupulous means.  Where corruption exists, prosecution is the proper remedy.  And in this regard, it is beyond ironic that some of Warren's wealth was obtained through her own career deceptions.

Furthering the insult, Warren delegitimizes our values, devalues our work, and inflicts guilt by telling us "there is nobody in this country who got rich on his own" (later echoed by Obama saying "you didn't build that" and reiterated by Warren in the current election cycle):

But here's the deal.  I guarantee you built it at least in part using workers all of us help pay to educate. Yeah. You built it at least in part, getting your goods to market on roads and bridges all of us helped pay to build. Yep. You built it at least in part, protected by police and firefighters all of us help pay their salaries.

It is certainly true, and a genuine blessing, that we all enjoy the legacies of prior generations, just as we wish the same for our children and their children.  But every one of us has that benefit, nevertheless.  Some of us, in exercising the values that made this country great, are going to realize success from that shared starting point, and are justly entitled to reap and keep the rewards of our efforts.

This is a crucial point, and a basic distinction between capitalism and socialism.  Warren looks across this country and sees "too many" individuals holding "too much" of the country's wealth.  She especially despises inherited wealth.  To put it bluntly, Warren is telling us that we do not meet her standard of justice and is seeking to impose her morality on the rest of us.  While one can wonder how Warren became privileged to make such assessments, her view is precisely aligned with contemporary progressive economics.  If you value a society having purely communal property, then a wealth tax is a pathway to that goal.

But if you prefer a society that rejects Marxist thinking and instead values liberty and individual sovereignty, you understand the vital importance of private property.  Consider an artist who spends several months' time producing a painting, only to have it stolen.  Because the theft denies the artist personal gain from the work's exhibition or sale, the artist's life may as well have been shortened by the time she spent producing it.  This essential linkage -- the outpouring of our finite lifetimes into the products of our labor -- is the very nature of, and justification for, "property."  The obligation of a legitimate government to protect our lives and our liberty inescapably demands the protection of our private property -- wealth included.  Our wealth is not simply our property.  Our wealth is our lives.

Understood as theft, the confiscatory nature of a wealth tax is its worst feature.  Each year, you hand over to the government a share of your savings (under Warren's plan, 2% of all of your assets, which can mean liquidation to comply).  You can only watch as your hard-earned capital shrinks over time.  Your life's product is steadily appropriated while Warren and unelected bureaucrats get to play with your money.

While I personally (disclosure) don't qualify under Warren's opening limits on the scope and reach of a wealth tax, history is instructive.  The federal income tax also was promised to apply only to the "wealthiest" among us.  How things change.  Today, if you are an ordinary working, contributing member of society, you are taxed on what you earn, and not trivially so.  The income tax has been perverted from a source of federal funding to a tool for income redistribution, one that "has evolved into an enormously complex social document . . . betraying the original design of its creators." (See Cato p.223)  Its creation a century ago shares uncanny parallels with Warren's wealth tax proposal of today.  Leveling the "ultra-wealthy" is Warren's stated purpose, but only a fool would doubt that a wealth tax will eventually reach lower levels of "wealth."

Warren disguises the theft that a wealth tax represents by asserting that justice demands it.  But to say that justice is achieved by handing our wealth over to the likes of Elizabeth Warren is preposterous.  There can be only one reason to support such a proposition:  Ignorance.