The Democrat presidential primary race is shaping up to be a competition about which candidate makes the better case for confiscatory wealth taxation. By that measure, Elizabeth Warren has taken an early lead with a planned wealth tax that would take $2.7 trillion over ten years from Americans who had earned it, paid taxes on it, and invested it.
Not to be left behind, Democratic Socialist Bernie Sanders has announced his plan for a steep increase to the estate tax, again on wealth that had been earned, possibly by multiple generations, and on which taxes had already been paid. Reuters reports on what it calls Democrats’ plans to “soak the rich.”
The last Democrat to win a presidential election, Barack Obama, ran in 2012 on a platform of raising taxes for top earners to nearly 40 percent. Now a new crop of Democratic presidential hopefuls is signaling that they want to go even further.
Massachusetts Sen. Elizabeth Warren is floating a 2 percent tax on all assets of people with a net worth of more than $50 million — a moon-shot plan that could face legal challenges for hitting investments, homes and cars, not just income. Vermont Sen. Bernie Sanders is pitching a steeply higher inheritance tax on large estates.
Others targeting higher income earners include California Sen. Kamala Harris, who has proposed rolling back the recent GOP tax cuts for wealthier families to pay for tax rebates for middle- and lower-income earners.
The eruption of high-end tax proposals is a shift for Democrats, who have traditionally not centered their presidential bids around tax hikes — particularly at this early stage of a campaign. It underscores the party’s march to the left and candidates’ desire to tap into the Wall Street-rattling energy of liberal voters.
“If you’re looking for a bumper sticker, ‘tax rich people’ is a pretty good bumper sticker,” said Howard Glickman of the centrist Tax Policy Center.
Beyond its messaging power, taxing the wealthy also gives Democratic contenders a way to propose paying for their sweeping progressive agendas.
Sanders put it simply last week: “We need additional revenue if we’re going to provide health care for all, rebuild our infrastructure, make public colleges and universities tuition-free.”
Despite their wealth tax plans, there’s not enough money in all of America to pay for the spending these candidates want to do. Nowhere in their plans have Democrats yet described how they will increase economic growth, the one possible way to sustainably lower deficits, create jobs, and raise Americans’ standard of living.