For all of the liberal caterwauling about disparities in wealth, one thing I don’t understand is why no one, not even the socialist senator from Vermont Bernie Sanders in full bulging-neck-vein mode, has started channeling Huey Long and calling for a serious wealth tax. After all, even if you raise the top marginal income tax rate back up to the Krugman nirvana level of 91 percent, it won’t touch the vast wealth of the Buffetts and Gates-ses of the world for a simple reason—the great bulk of their wealth was accumulated not as income subject to tax, but in the appreciated asset value of their investments and businesses. It has been the rise in asset values over the last generation that has contributed more to wealth disparities than differences in earned income levels. That’s why higher income tax rates do little or nothing to reduce wealth disparities, and why it is of little consequence for Buffett and Gates to support higher income tax rates. And with just a few bits of fancy tax accounting footwork, the Buffetts and Gates-ses can tap their wealth without having to pay income taxes on it even then.
I’m surprised that not even the inventive Cass Sunstein has argued that if there had been equity securities at the time of the Founding, the Founding Fathers would have subjected them to the equivalent of a property tax. After all, one of the earliest taxes, challenged unsuccessfully at the Supreme Court in Hylton v. U.S. in 1796, was a carriage tax that the Court ruled was a permissible excise tax just like taxes on land. And just who would have been paying “carriage taxes” in 1796? Why, the 1 percent, of course. It was a tax on rich people, probably enacted in response to the populist “Occupy the Stable” movement.
Here’s how Huey Long argued the case in his “Every Man a King” speech in 1935:
Every man a king, so there would be no such thing as a man or woman who did not have the necessities of life, who would not be dependent upon the whims and caprices and ipsi dixit of the financial martyrs for a living. What do we propose by this society? We propose to limit the wealth of big men in the country. . .
We have to limit fortunes. Our present plan is that we will allow no one man to own more than $50,000,000. We think that with that limit we will be able to carry out the balance of the program. It may be necessary that we limit it to less than $50,000,000. It may be necessary, in working out of the plans, that no man’s fortune would be more than $10,000,000 or $15,000,000. But be that as it may, it will still be more than any one man, or any one man and his children and their children, will be able to spend in their lifetimes; and it is not necessary or reasonable to have wealth piled up beyond that point where we cannot prevent poverty among the masses.
C’mon liberals; step up. It isn’t necessary to go as far as Long (heh). An excise tax of 1 percent on Buffett’s assets would yield something like $350 million a year. Throw in Gates, the founders of Google, Apple, and Facebook, and the Hollywood moguls, and we’re looking at billions a year. And why not? They can afford it. Oh wait, you’re right. If liberals actually proposed an honest-to-God wealth tax, a lot of those rich Silicon Valley and Hollywood liberals would become Republicans in a big hurry. But this also shows you what craven wusses liberals are today.