You can’t spend $1.9 trillion you do not have.
So, now the administration is apparently giving weight to the likes of populist socialists like Senator Elizabeth Warren, and considering a wealth tax.
When asked about the idea on ABC’s “This Week with George Stephanopoulos” Treasury Secretary Janet Yellen admitted that, “that is something we haven’t decided yet and we can look at.”
She did note that President Biden campaigned on his intention to raise taxes for individuals and corporations as well as capital gains and dividend taxes.
A group of progressive lawmakers led by Senator Warren recently introduced legislation that would create an annual 2% tax on the net worth of households between $50 million and $1 billion. And, an additional 1% on those above $1 billion.
Critics says a wealth tax would not be constitutional. It would effectively be “taking” property from an individual that rightly owned the property. Indeed, in order to even have an income tax, Congress needed to pass a constitutional amendment in 1913.
Meanwhile, critics of a wealth tax also say a system like that would ultimately penalize the middle class by causing billionaires to find “loop holes” to invest and keep their money offshore. The tax, they say, could even drive those with wealth out of the U.S. much like high taxes under Hollande in France.