Government costs money; therefore, it must take in revenue. Governments have three ways to raise money; taxes, sales of assets, and a printing press. Every American has a stake in this country, and most people pay taxes of some sort. We all appreciate some of the ways the government spends our tax money, and we all resent some of the ridiculous ways some of our tax money is squandered.
Unfortunately, taxes and asset sales are historically insufficient to cover the annual spending of our behemoth government, “forcing” the government to print money (we know that today’s “printing press” is electronic, but the end result is the same). Reducing the annual Federal budget shortfall would be better accomplished by growing the economy. The nation’s economy is expansive, and also expanding. Economic growth is critical to paying our increasing national bills.
Sadly, many people do not understand that our economy is both flexible and responsive to good policy. Mistakenly ignoring economic expansion leads to implementation of bad policy. “Robbing Peter to pay Paul” is not only bad policy, it is unnecessary. Current proposals to tax wealth in addition to income are anti-growth, and therefore constitute bad policy. Unfortunately, supporters of a Wealth Tax believe that our economy (the national “economic pie”) is, and shall always be, fixed at the size it is now. Under that premise, if you or I gain a dollar, someone else must lose it. This is wrong-headed and ignorant.
The best example I have found is Mark Zuckerberg, founder of Facebook, whose estimated Net Worth right now is estimated to be about $66.9 Billion. Under the Elizabeth Warren proposal, Mr. Zuckerberg would pay (on top of all the other taxes he currently pays), about $2 Billion in annual Wealth Tax. Many Americans would be delighted to see this Silicon Valley mogul taxed heavier, but I am not among them. In fact, I would like to see him taxed less.
Americans are the world’s leaders in innovation and entrepreneurship. That has propelled the USA into the economic leadership position we have enjoyed for decades. Those who seek to make their fame and fortune by practicing capitalism should be encouraged, not discouraged. That is the essence of America and its free economy. In short, entrepreneurship will grow the economy.
Mark Zuckerberg is rich. He is, in fact, fabulously rich. Good for him; good for us. The Wealth Tax on Zuckerberg’s net worth would generate about $2 Billion in annual government revenue. At the current rate of government spending, that would be spent within about 3 hours. How would that help?
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