AN ELECTIVE WEALTH TAX
- Eric Reis
- 22 hours ago
- 1 min read
Abstract:
Foes of wealth inequality face a basic dilemma. Economic restraints make it impractical to tax
income at the very high rates needed to address inequality, while constitutional restraints likely make it
impossible to tax principal (wealth) directly.
This problem can be solved by marrying the two approaches. The wealthiest taxpayers would be
put to a choice: Pay very high income tax rates, or pay more typical income tax rates along with a wealth
tax. Because the proposed wealth tax would be voluntary, it should avoid the constitutional difficulties
that bedevil a conventional wealth tax. And because the increase in income tax rates would serve mainly
as an incentive for individuals to opt into the wealth tax, it should avoid the economic difficulties that
normally accompany such elevated rates. This elective wealth tax may provide a powerful new tool for
redistribution of extreme wealth.
