There are a lot of bad tax ideas out there, and most of them have been tried and backfired.
— Confiscatory progressive income taxation (over 90% in the United States and the United Kingdom in the 1960s).
— Luxury taxes on yachts, furs and expensive cars (adopted in the early 1990s but abolished completely in 2001).
— Value added taxes (VAT), a hidden tax that tends to increase dramatically over time (some as high as 30%).
But the worst of the lot is a wealth tax like Senators Bernie Sanders and Elizabeth Warren are advocating. There are a lot of problems with the wealth tax. It is a bureaucratic nightmare for government workers to try to determine who qualifies and who doesn’t, and how to value illiquid assets like artwork and real estate.
A wealth tax encourages capital flight by affluent citizens. It is a huge invasion of financial privacy that forces citizens to list all their assets. It makes everyone a criminal because most people are unlikely to report all their assets (such as gold and silver coins, diamonds and artwork).
Most importantly, it is a tax on savings and capital investment, which is essential for economic growth. The Democratic socialist candidates Sanders and Warren say not to worry, “we won’t raise the tax on the middle class,” but isn’t that what proponents said about the income tax in 1913? It was supposed to be a tax just on the wealthy, but it wasn’t long thereafter when the tax applied to everyone and the rate jumped.
Not surprisingly, many countries, especially in Europe, have tried a wealth tax and have repealed it.
In 2004, a study by the Institut de l’enterprise investigated why several European countries (Sweden, France, Germany, Iceland, etc.) were eliminating wealth taxes and made the following observations: 1. Wealth taxes contributed to capital drain, promoting the flight of capital as well as driving out investors. 2. Wealth taxes had high management cost and relatively low returns. 3. Wealth taxes distorted resource allocation, particularly involving certain exemptions and unequal valuation of assets. The institute’s summery concluded that the “wealth taxes were not as equitable as they appeared.”
Former British Chancellor Denis Healey concluded that attempting to implement wealth taxes was a mistake: “We had committed ourselves to a Wealth Tax: but in five years I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle.”
Steve Forbes wrote an excellent op-ed on the wealth tax. Read it by clicking here. Enough said.
Steve Forbes is Confirmed for Next Year’s FreedomFest 2020: Catch the Vision!
Yesterday, Jo Ann and I met with Steve Forbes in his offices in Jersey City, and he was ecstatic about speaking at next year’s FreedomFest. “I can’t wait,” he said.
The dates are July 13-16, 2020, at the Paris Resort, Las Vegas. (Note the dates are Monday through Thursday.) It has created a lot of buzz, with nearly 500 people already signed up to set a record for this early date. Why? Because of our special keynote speaker, clinical psychologist Dr. Jordan Peterson, author of the bestseller, “12 Rules for Life.” Dr. Peterson has been called “the most dangerous, polarizing figure since Gandhi”… “the most influential public intellectual in the Western world today”… and “the most important spokesman for liberty and civil justice since Milton Friedman.”
For many young people, he is considered “a prophet for our times.” Many students have told me that they can’t wait to hear and meet him. One told me, “He’s changed my life!”
Watch our three-minute video: https://vimeo.com/349520234.
We expect a record crowd this year. Our early bird discount is the best offer we’ve ever made: $399 per person, and $299 for a guest. For more information, and to register, click here. Or call toll-free 1-855-850-3733, ext. 202, and be sure to mention code FF20EAGLE.
One Day Miami Investment and Latin American Conference is Tomorrow, Nov. 8: Speakers include Rodolfo Milani, Louis Navellier, Art Hogan and myself, as well as a cohort of Latin American heroes: the blood poet of Cuba, Armando Valladares; Cuban freedom activist Rosa Maria Paya; former defense minister for Bolivia Carlos Sanchez Berzain; and exiled Cuban author Carlos Montaner. The price for this one-day event is $89 per person/$149 per couple. To register, contact Nathan at 1-855-850-3733, ext. 202. Attendance is strictly limited to 85 people. Don’t delay!