“While reasonable people can debate the most effective means of taxing wealth, there is a strong case to be made for bringing back heavier levies on the fortunes of the wealthy. Wealth inequality has increased considerably since the middle of the 20th century when the general property tax was being hollowed out…
“Our current system of selective wealth taxation through the property tax is largely neglecting—and in some ways even worsening—these problems. Data from the Federal Reserve indicate that the bottom 90 percent of families have more than half of their net worth tied up in real estate, whereas the top 1 percent have just 13 percent of their wealth in real estate.”
Some of our writing on this issue:
“Why would it be unfair to tax the super wealthy on total net assets when middle class homeowners already are taxed on the value of homes largely financed through debt on which they pay interest to banks (whose profits flow disproportionately to the wealthiest)? Existing American wealth taxes — state and local property taxes — now finance most K-12 education. A national wealth tax could be used to make school funding more equitable and lessen the tax burden on the middle class. We already tax the middle class on property it partially owns. So why not tax the wealthiest on the value assets they own lock, stock and barrel?
“Incentives are key to enforcement. A progressive wealth tax — rising in increments from point A to point B — could be enforced by applying the maximum rate to all households with wealth over a given threshold, and leaving it up to filers to document to the IRS that the lowest allowable rate is appropriate. Finally, a reasonable tax rate could provide an incentive for investment that spurs economic growth. A high rate could stifle it.”
Under such an enforcement system, Donald Trump would have dueling incentives: 1) maximizing the value of assets for the purposes of getting a loan and 2) minimizing asset value for the purposes of federal taxation.