Democrats are going big on something that’s been popular for years—taxing the rich.
But while there’s no doubt the new proposals from the left fare well in polls, there’s plenty of real-world evidence that soaking the wealthy won’t raise the money to fund the progressive agenda and, in some cases, may face constitutional and administrative challenges.
There are many reasons a direct tax on wealth might not work: First, rich people have a wide range of tax avoidance schemes. Second, it’s hard to measure wealth in order to assess tax levels, especially assets like art. On top of that, there are legal and constitutional questions about targeting a particular demographic.
Even in places where they have been tried—like Europe—wealth taxes have largely been abandoned.
“A wealth tax could raise a lot of revenue—unless it raises absolutely zero,” said Daniel Hemel, a law professor at the University of Chicago and a one-time clerk for Justice Elena Kagan. “I’ve much less confidence in the constitutionality of a wealth tax than I did that Hillary Clinton would get elected.”
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