Notice that it is basically impossible to extract a significant amount of additional wealth from the 0.1%. It is both well-defended (politically and legally) and tied up in complicated structures that are difficult to liquidate by force. Notice also that the middle class have no such protections.
I'm assuming by wealth tax you mean some sort of magical system where Zuckerberg is forced to pay off your student loans. However what will actually happen is the wholesale liquidation of the middle class to fill the twin bottomless pits of medicare and social security, while the billionares skip the country and/or hide behind arcane tax rules, and the Valley they leave behind gets turned into a jobs program for the homeless.
The other fundamental problem with giving a big additional slice of the national wealth to the poor is that they will spend it on consumer services (not goods, which are cheap), for which they have great pent-up demand. And then it'll be gone. At which point you no longer have a middle class to extract from.
> it is basically impossible to extract a significant amount of additional wealth from the 0.1%.
I'm not sure I buy this. If the IRS can measure income, they can also measure wealth. Sure rich folks will try to hide wealth, but they've also tried to hide income and the IRS when well funded is decently competent at finding it.
> The other fundamental problem with giving a big additional slice of the national wealth to the poor is that they will spend it on consumer services
That's no what anyone is advocating. They are advocating basic healthcare and education, not exactly consumer services.
> At which point you no longer have a middle class to extract from.
Even super leftist democrats are not advocating taxing the middle class. They are focusing on the super rich. The somewhat nice thing about this type of taxation is that even though it'll effect the absolute money you have, it won't affect your wealth rank. Sure, maybe Bezos' or Gates' net worth will go down, but they will still be the richest in the US. Your low-millionaire friends may be slightly less rich, but they will still be just as rich rank-wise as they were before.
Folks generally get less upset about taxes if it keeps their existing rank and standing in society
On a tangent on giving medical subsidy to the poor: this likely gets lumped into Medicare, yes? And Medicare is close to insolvency. The only way to prop it up is, of ocurse, taxpayer dollars.
The difference between goods and services is in the elasticity of supply. Double the demand for iphones? Apple will have it sorted in six months. Double demand for doctors? First be prepared for expensive doctors for the next ten years. Those doctors will get paid more, but there are only eight hours in a workday, so they treat the same number of patients. New doctors take a long time to train and have to contend with predicting economic conditions several years into the future. Net result: transfer of wealth from tax payers to doctors, little economic gain, worse average doctoring experience.
Tax payers including those with expertise in setting up production of goods. Who could have used the marginal money to set up new businesses and produce physical stuff. Opportunity cost is high, as always.
Everybody is focused on the superrich, it's a convenient target. But how many Zuckerbergean fortunes does it take to balance the books on medicare? What's to stop him from migrating to the EU if it saves a few billion dollars?
The real extractable money is in the middle class, whose wealth passes through government-controlled bank accounts. Of course, when the time comes the lefties will be all "well actually anyone making above 80k is superrich - have you seen the homeless lately? CYP!"
>They are advocating basic healthcare and education, not exactly consumer services.
You could either give them the money directly, in which case it'll go to consumer services. Or you can subsidize their healthcare, in which case they will use the money they save on consumer services. The difference is that the government has a long track record of inefficiency and waste when it comes to subsidies.
> Everybody is focused on the superrich, it's a convenient target.
It's a convenient target because the super-rich have never had as much wealth and power in the entire history of the U.S. as they do now. Inequality is worse now than it has ever been.
Consider an extreme hypothetical, where one person in a country has all the wealth, and everyone else has zero. That obviously cannot sustain a functional democracy. Now consider the other extreme, where everyone is mandated to have exactly the same amount as everyone else. Both are distpoian, but we are far closer to the former than the latter.
Have you done the math, though? Consider the not so extreme nonhypothetical of how many Zuks it would take to make Medicare/Social Security solvent.
The only way to make an amount of extra taxmonies actually worth getting up for is to tax the middle class. Alas, economics is not a zero-sum game, some people have invest their wealth to actually produce stuff to make it all work, and this mostly comes from the wealth of the middle class.
I haven't but others have (e.g. Warren). A 2% wealth tax on assets over $50M will generate $3.75T over 10 years. Even if the actual number is half of that, it's still plenty to pay for many progressive programs.
The total number of billionaires in the US will drop to zero a week before this is passed into law (or maybe one or two, the remaining being people who have decided that ultra-virtue-signalling-slash-conspicuous-consumption is worth 6%/yr and who have nevertheless squirreled away most of their wealth into various nonprofits and the like), and the number of people with assets over $100m will dropped to maybe 5%. Unless they plan to retroactively tax people fleeing before the law passes, I doubt it will generate one-twentieth that amount. A person with asset of $100m will be paying $1m/year under that system. Uprooting yourself from the US is painful, but $1m/year soothes a whole lot of pain. Even more so for billionaires.
If it does become law, though, I fully expect that $50m ceiling to come down year by year as the economic situation worsens until sub-$1m. Or maybe they keep it the same and hyperinflation will meet it on the way up for the same net result.
I'm assuming by wealth tax you mean some sort of magical system where Zuckerberg is forced to pay off your student loans. However what will actually happen is the wholesale liquidation of the middle class to fill the twin bottomless pits of medicare and social security, while the billionares skip the country and/or hide behind arcane tax rules, and the Valley they leave behind gets turned into a jobs program for the homeless.
The other fundamental problem with giving a big additional slice of the national wealth to the poor is that they will spend it on consumer services (not goods, which are cheap), for which they have great pent-up demand. And then it'll be gone. At which point you no longer have a middle class to extract from.