Dear Democratic Presidential Candidates-
You are all having a wonderful time debating the proper method and levels by which to tax wealth. (Imagine the things we could do with all that money you plan to claw back from the “uber wealthy!”)
Elizabeth Warren, for instance, lists “Rebuilding the Middle Class” as a core campaign promise. She has 27 individual plans associated with this idea, including the Ultra-Millionaire Tax, which is described as a tax “on America’s 75,000 richest families to produce trillions that can be used to build an economy that works for everyone, including universal childcare, student loan debt relief, and down payments on a Green New Deal and Medicare for All.”
The thing is, that statement is inaccurate. Her plan will not “produce trillions.” Nothing is being produced. Things are being taken from a small number of families and given to a larger set of families.
We just want to offer up the following idea – and it may sound a little crazy, so let’s just throw it against the wall and see if it sticks – but how about instead of spending all your time talking about taxing wealth, how about talking a little more about creating wealth?
Pretty novel, right?
We know, we know, things like entrepreneurship and small business and free enterprise are not nearly as en vogue as the concept of picking Bill Gates’ pockets and buying everybody a burrito. That said, there are an awful lot of people out here who believe that we can generate our own wealth if the government would just help a little or get out of the way. Then you could tax us more!
Listen, all snark aside, small business is the engine that drives the U.S. economy and it simply is not being talked about enough.
On Warren’s website, in that list of 27 plans to rebuild the middle class, entrepreneurship is only mentioned once, and small business is not mentioned at all. There are plenty of mentions of workers, and farmers, and jobs- but not nearly enough mention of the people who help create jobs.
There are reasonable discussions to be had around many of these initiatives. There are reasonable discussions to be had about tax policy, about empowering and growing the middle class. There are reasonable discussions to be had about large technology companies and farmers and workers and trade and wages. But small business and entrepreneurship are central to these discussions, and right now they seem peripheral at best.
Cory Booker supports legislation that would create what are called “baby bonds.” A baby bond would give every American child a $1,000 savings account at birth. The account would earn interest and receive additional deposits each year. It would be paid for by changes to inheritance and estate taxes. All of this is offered in the name of increased fairness and opportunity. Here is some money when you are born, you can use it as an adult, and we will take it back when you die.
These systems are not designed to create opportunity for people to become wealthy, they are designed to make people better at being relatively poor.
Plans like this have not worked, by the way. According to the Cato Institute, 12 European countries had wealth taxes in place in 1990 and just three continue to have them today.
Simply put, wealth creation is a better plan than wealth taxation. Let’s talk about it.