Ian Simmons, Co-founder and Principal, Blue Haven Initiative, has written a letter to 2020 presidential candidates to impose a wealth tax of 2% on net worth > $50 million. Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center, presented a Powerpoint talk about tax policy. A panel then discussed tax policy and wealth tax as a policy, here and in Europe.
While Simmons has worthy goals, I agree with Alan D. Viard of theAmerican Enterprise Institute (AEI). His point is that a wealth tax is not the best solution to income and wealth inequality, suggesting instead a mark-to-market tax. This has the advantage of being easily integrated into the existing tax framework, avoiding a more complex system. I think that Simmons can better achieve his goals with a foundation devoted specific causes, such as climate change. It could function like the Gates Foundation. It is also odd that funds raised from the wealth tax would, or could, be earmarked for particular projects. That probably can’t work, because the government determines how revenues get spent. Also, as panelist Beth Kaufman pointed out, constitutionality would be challenged in court.
To conclude, tax policy might be used to better balance wealth and income inequality, especially worthwhile in strengthening democracy. A wealth tax does not appear to be the best solution.