The recent column by Washington Post columnist Megan McArdle is a great example of the “common-sense” misdirection on wealth taxes popular in neoliberal circles. She (sarcastically?) implies that these taxes will literally take billionaire’s yachts and homes and giving them to the poor. Her solution? “Aggressively taxing consumption.”
Unfortunately, as she correctly points out, ultra-wealthy people consume very little as a proportion of their total wealth. There are only so many yachts one needs, after all. Poor people, on the other hand, spend a much higher amount on goods and services, and sales/value-added taxes don’t fluctuate depending on the purchaser’s total wealth. They are flat, and therefore regressive. They hit poor people harder.
This privileged take isn’t surprising, as conservatives like McArdle have consistently trumpeted a “bootstrap” American mythology which simply doesn’t exist anymore. As the World Economic Forum rightly pointed out, the American Dream is alive and well; in Denmark.
Most wealth taxes that I’ve seen proposed will affect a very small percentage of this newspaper’s readership. Biden’s income tax hikes would affect those who make more than $400,000, for example, while Elizabeth Warren’s wealth tax would only hit those with more than $50 million in assets. This somehow strikes people as “unfair,” neglecting to understand the deep subsidies the government has provided to allow the gain of that wealth in the first place.
It’s time to reject the hazy logic of trickle-down economics and bootstrap economics, which have allowed billionaires and corporations to effectively capture our economy and government. Don’t allow McArdle’s poorly argued talking points distract you from the core of real American values: egalitarianism and social mobility.