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From rising gas prices to major profit losses, almost everyone has been affected by inflation. The economic uncertainty has had an especially profound impact on low-income Americans who have been struggling to pay for necessities like food and rent. However, some economists say that there is a solution. Some economists and Modern Monetary Theorists argue that inflation can be controlled by reducing the money supply in ways other than the Federal Reserve raising interest rates. One way policymakers can reduce aggregate demand in the economy is by introducing taxes on the wealthy, reducing inflation, and in turn, benefiting everyone in society by stabilizing prices. A new by Data for Progress finds 54 percent of voters believe that taxing the rich would help control inflation. Among those voters, 78 percent of Democrats, 52 percent of Independents, and 28 percent of Republicans agree that a tax on the rich will help reduce the effects of inflation. While the rise in prices has greatly affected the poor and middle class, taxing the rich will help control the money supply and ease the burden that Americans are feeling.

In contrast, Biden’s proposal to tax wealthy individuals can help decrease the money supply in the economy without harming virtually anyone. America’s millionaires and billionaires are doing and have made out like bandits over the course of the pandemic. They can absolutely afford to have their wealth grow a little less than it normally would because of higher taxes. If that happens, they will want for nothing–that is, of course, if they even notice it at all. Tackling inflation doesn’t just involve lowering demand: It also involves helping supply meet the moment and keep pace with demand by boosting the economy’s productive capacity. If Biden and the Democrats play their cards right, the revenue raised from tax hikes on the rich could help fund other parts of Biden’s plan. For example, investing in clean energy, fixing the supply chain, and improving our infrastructure.

Did you know progressive taxes helped beat Hitler? If not, don’t worry, you’re not alone. It’s worth looking back at how taxes helped tackle inflation during World War II and what lessons NC leaders still need to draw from that bit of economic history. During and right after WWII, the Roosevelt Administration faced extraordinary inflationary pressures, driven by some of the same dynamics we see playing out right now. In the current moment, supply chain disruptions, stimulus that could have been better targeted to people in need, and shifts in consumers’ purchasing patterns mean more demand for some goods and services than the market can easily meet, allowing companies to increase prices. In WWII, civilian productivity was diverted to the war effort as companies like Ford started making tanks instead of cars. Meanwhile, many workers, like women who came to work in factories vital to the war effort, saw their incomes rise significantly. In both instances, constrained supply and expanded consumer demand threatened to create an inflationary feedback loop with prices and wages driving each other up, undermining the stability of the dollar and the US economy. Just as now, letting that kind of spiral set in would have been an economic disaster. Allowing inflation to upend the civilian economy threatened the industrial foundation of the war effort, so the Roosevelt Administration implemented a raft of policies to keep prices in check. Price ceilings for consumer goods, wage freezes for major industries, ration cards, campaigns to get U.S. citizens to invest in war bonds instead of buying consumer goods, and … wait for it … progressive taxes. The dual need to pay for war against fascist powers and to combat inflation on the home front led to deep restructuring of the US tax code. Having already established a wealth tax in 1935 to help pay for policies to fight the Great Depression, the Roosevelt Administration pushed through a variety of tax changes during and following WWII. The top marginal rate for personal income taxes %and would ; the individual income tax was expanded beyond the very wealthy to apply to tens of millions of Americans; the corporate tax rate went up, and a 90% tax on excess corporate profits was created. All of these measures helped to pay for the war, but they also were designed to combat inflation by reducing excess consumer demand. And it worked. Inflation did peak at more than double the current rate as WWII soldiers returned with cash in their pockets and industry transitioned back to a civilian footing, but we never saw the runaway spiral of wages and prices that would have unmade the US economy. We’ve seen some efforts to use tax policy to combat inflation over the past year. By , the Inflation Reduction Act moved to tax excess wealth. these changes will curb inflationary pressures on prices. Across the pond, the UK recently imposed that have used the current environment to rake in record profits.

(Liam, Law/Phil@NYU, https://www.bostonreview.net/articles/liam-murphy-how-not-argue-tax-justice/ , 10-30)

This brings us, last, to their normative theory of justice. Saez and Zucman are economists, not political theorists, yet they clearly have a political vision. What is it, exactly, that leads them to claim that “injustice” has triumphed? They never make their conception of justice fully explicit, but it is possible to discern a few features. My sense is that their view of the market is one that I share: its moral value lies entirely in its superiority to alternatives in promoting overall welfare and (I would add) its compatibility with individual liberty. There is no moral significance to the particular allocation of rewards a purely laissez-faire market would produce and in fact, for markets to be compatible with justice, they have to be carefully regulated so as to avoid laissez-faire outcomes. The foes of this view—proponents of libertarianism, or “market fundamentalism,” as Saez and Zucman call it—hold that pretax incomes are just precisely because they result from market exchange. There are two versions of this idea. One appeals to some natural moral entitlement to property, so that whatever property I end up with after free exchange simply belongs to me. The other appeals to some notion of just reward, or desert, so that I am entitled to the results of market exchange because I deserve them. Each view is subject to strong objections. One that applies to them both is that pretax market returns are not, in fact, ideally competitive free-market returns, but market returns earned in an economy shaped by all kinds of government policy, taxation included. Pretax income can’t be used as a baseline because it is, in fact, an output of the very system (taxation and all the rest) we are trying to make just.

(Jack, etired Professor of Humanities from Roosevelt University in Chicago https://inequality.org/research/we-cant-afford-not-to-have-a-wealth-tax/ , 10-29 )

Once established, a wealth tax could easily expand in small increments to a perhaps more reasonable 4 percent, producing $2 trillion a year in revenues, based on current levels of wealth. Or we could tax higher levels of wealth at higher percentages, as Senator Warren proposes, with tax rates on billionaires reaching 6 percent. Even at those higher rates, the wealthy would go on getting wealthier. But taxing the wealth of these wealthy would open a cornucopia of public capital to invest in addressing our multitude of problems and in bettering working people’s lives. By not taxing wealth we are failing to tap by far the largest source of our potential public revenues. And because the wealth of the wealthy confers both economic and political power, we cannot adequately defend democracy if we go on allowing our economic oligarchy a completely free lunch. A clear majority of Americans support most of the family-friendly policies listed above. Even larger majorities support the notion of a wealth tax, with nearly two-thirds of Americans favoring a tax on grand fortune. Imagine that. The polls are showing higher support for taxing the rich than for the beneficial programs that taxing the rich could finance. Makes you wonder why our elected representatives, especially Democrats, are not standing in line to support such a combination of policy and pay-fors.

PART IV: The Common Sense of Taxing Wealth A progressive wealth tax has a uniquely American pedigree, coming directly from the foremost popular writer of the Revolution. Paine’s plan for a wealth tax sprang from the same source as his impassioned case for an American republic: a lifelong advocacy for freedom from concentrated power. In this Part, we summarize our new conclusions about the wealth tax debate based on a synthesis of the four tax proposals included in our review: Paine’s tax on the yearly value of estates, Warren’s annual tax on net worth, Batchelder’s tax on inheritances, and Wyden’s tax on unrealized income. Viewed together, these proposals clarify the centrality of political values that motivate tax policy, including the enduring concern with wealth as a challenge to democratic ideals. They also illustrate the fluid relationship between income taxes and wealth taxes. Lastly, they prompt a renewed consideration of a 100% marginal rate for certain tax bases. Paine’s work encourages us to consider tax policy as a primarily political endeavor. Rather than a set of technocratic nudges, Paine proposes we assess a tax’s effect in terms of the polity, rather than simply the economy. This standard for evaluating tax policy is remarkably prescient, as 21st Century proposals to tax wealth again invoke the challenge of concentrated political power as a central rationale.150 And to the extent that addressing concentrated political power is a central focus for evaluating the desirability of a tax, then tax policy that targets concentrations of wealth becomes the ideal form of tax.151 If the corruptions of political and economic life that Paine criticized are with us today, his proposal warrants serious consideration. Indeed, Paine’s proposal seems especially relevant to the contemporary moment if we directly compare the wealth distribution of late 18th Century Britain with that of the contemporary United States. At the start of the 19th Century, the top one percent of British households received about 15 percent of the total national income.152 In the United States today, the amount of income received by the top 1% of earners has risen from 10 percent in 1980 to 19% in 2019.153 Similarly, the top 1% of estates in Paine’s Britain held 24% of all wealth; the top 1% of American households have 27% of total wealth.154 The level of economic inequality in the contemporary United States is strikingly similar to the level that Paine believed corrupted British politics. And, just as Paine claimed, extremes of wealth corrupt American elections and distort American politics.155 The level at which Paine believed “there ought to be a limit to property, or the accumulation of it by bequest,” is directly comparable to the highest levels of wealth in America today. Paine also reveals the limited analytic value of sorting tax policy by its taxable base. While anxiety over the constitutionality of wealth taxes has swallowed much of the public debate, the ease by which Warren’s UMT can be converted into Paine’s tax on yearly value also demonstrates the limited substance behind the wealth tax versus income tax preoccupation. While it is not the ambition of this article to resolve the direct tax dilemma posed by Pollock, it should be obvious that a tax of 5% on the net worth of an individual who enjoys a 5% rate of return on their wealth is economically equivalent to a 100% tax on a 5% rate of return of that same individual. Perhaps the most eye-catching aspect of Paine’s wealth tax is its top rate: 20 shillings in the pound, or 100%. There are good reasons to take this aspect of Paine’s proposal seriously. Properly designed to the fit the complex modern economy, there are many potential benefits to a tax that would in essence impose a maximum revenue from personal wealth. The 100% marginal rate is applied at levels of wealth that are indisputably luxurious: orders of magnitude beyond the needs of any household and beyond the reward that could plausibly be credited to individual industry. And while many of the most concerted critiques of expanding the taxable base or increasing tax rates hinge on claims to freedom, Paine’s own proposal is specifically motivated by the threat of oppression in a society without his tax plan. To be free, for Paine, one must be free to participate in representative government. “Overgrown influence” corrupts elections, Paine rightly informs us; because extremes of wealth are extremes of power, they erode republican government and leave the citizenry less free. To be clear, as we outline in Table 3, Paine’s 100% marginal rate on the revenue from wealth does not tax 100% of wealth. Paine’s tax would at its maximum apply a rate nearly equal to wealth’s rate of return, which has been, on average, about 5% in recent decades. However, the average tax rate under Paine’s plan would be substantially higher than 5% when wealthy people accrue enormous windfalls, as occurred during the first year of the pandemic. Through its responsiveness to rates of accrual, Paine’s tax would create a strong incentive for extreme wealth holders to divide or otherwise dispose of the portion of their wealth that is above the revenue cap. Were it to be implemented in the 21st Century, Paine’s proposal would strictly limit further accumulation by billionaires, and diminish the incentive to hoard wealth in the first place. By stemming the tide of economic inequality, his proposal would reduce the outsized power of wealth in political life. As we face the vital question of how to preserve and expand democracy in the United States, we should reconsider a plan that dates nearly to the country’s founding: Thomas Paine’s 100% marginal rate on the revenue from extreme wealth.

(Kelley R., Biden Wants a Wealth Tax: Should Billionaires Pay More?, Kiplinger.com , Lexis)

The Biden budget has just been released and President Biden wants to "raise some taxes." In recent speeches, Biden has said that tax increases should focus on the wealthiest taxpayers - an approach that some states have adopted or recently proposed. So, while you're worrying about the 2023 tax deadline and trying to pay as little tax as possible, the wealth tax debate is heating up again...should billionaires and millionaires pay more?

Given that further tax rises on the general public have become politically untenable, politicians are turning to targeted taxes on the wealthy to manage excessive debt levels. The UK has already changed its capital gains tax rules in a bid to target wealthy individuals with financial assets by halving tax-free allowances to GBP6,000 in 2023/24 and again the following tax year. This may seem menial to many HNW and affluent clients, but it signals the beginning of a wider trend. This sentiment is increasing globally. Colombia has recently introduced a new wealth tax on assets over $630,000, aiming to raise over $11bn from the country's richest 2%, and has announced intentions to create a Latin American tax summit at the World Economic Forum (WEF) in Davos. Due to fear of capital flight, the Philippines stopped short of implementing its own wealth tax but signaled its intent to tax the rich through large levies on luxury goods as an alternative. The fear of capital shifting to friendly jurisdictions has long been a barrier to wealth taxes, so Colombia's experiment could help build a base of evidence and, depending on its success, increase their appeal. Political pressure will bring with it a greater chance of targeted taxation of the wealthy as governments search for ways to redistribute wealth and balance budgets. Brazil has recently re-elected Luiz Inácio Lula da Silva, who has promised to make the "wealthy pay the right amount in income and wealth taxes." Oxfam, meanwhile, has joined the call for wealth taxes, emphasizing that the richest 1% accumulated 63% of new wealth created from January 2020 to December 2021 in a recent study. Even 200 "patriotic millionaires", including Disney heiress Abigail Disney and actor Mark Ruffalo, used the WEF to urge governments to tax their wealth and tackle the cost-of-living crisis. GlobalData's Wealth Management Industry Conditions Analytics 2022 dashboard indicates that 68% of global wealth managers were very or extremely concerned over the tax treatment of investments and pensions. Despite concerns, changes are likely to be incremental, as no government will want to lose competitiveness in attracting investment in the short term. However, attempts to clamp down on tax efficiency schemes may prove a less controversial avenue for politicians and could challenge wealth managers in streamlining clients' finances. Wealth taxes may be likely, but they should also be gradual and minimal. Of the four countries in Europe with wealth taxes, none are all-encompassing and usually only apply to substantial holdings within that jurisdiction. This threat is within managers' influence: those that stay on top of changes in tax regimes can generate value to clients by efficiently managing their tax exposure. Wealth taxes undoubtedly inflict a cost on clients' portfolios, but they also present opportunities for advisors to demonstrate value.

Our results do not indicate that the wealth tax kills jobs in companies owned by the taxpayers. To the contrary, we identify a positive relationship between the wealth tax level and employment growth in small and medium sized family-run businesses. The positive employment effect of higher wealth taxes can be rationalized by a positive income effect on household savings, as well as by the fact that the wealth tax strengthens economic incentives to invest in assets that reduce taxable wealth. Familyowned businesses appear to be useful for tax avoidance purposes. Given the difficulty of assessing the true value of non-traded economic activities, the existence of a wealth tax provides an incentive to allocate wealth into such activities rather than into other (and more easy-to-assess) assets. Since the human capital embedded in employees does not enter into a firm’s balance sheet, raising employment in a family-owned business appears to be a particularly convenient strategy for wealth tax reduction. However, our finding of a positive employment effect on average does not mean that liquidity problems created by the wealth tax are irrelevant. For a small subset of liquidity-constrained business owners, we indeed identify negative employment effects.

A wealth tax could raise significant amounts of revenue. Even though Warren’s wealth tax would only apply to a small number of households, it could bring in substantial revenue, about $3 trillion over the next decade according to the estimate from Saez and Zucman. This is money that could be used to finance other government programs like childcare or infrastructure. A wealth tax seems fairer to some. A billionaire entrepreneur who owns their own company, like Bezos or Zuckerberg, is currently able to delay taxes on their business wealth. “If you never sell the stock, you will remit no capital gains taxes. If you pay no dividends, you will remit no individual income taxes at all as a result of owning that stock. To some, there is something unsettling about people who have tens of billions of dollars of wealth who pay little in taxes,” said Hoopes. They would not have the same ability to avoid a wealth tax. Wealth taxes could incentivize more productive uses of wealth. Since a wealth tax chips away at a person’s holdings each year, Lee thinks it could motivate them to spend or invest rather than hoarding. “In the long term, the wealth tax would encourage people to be more productive as otherwise your wealth would diminish gradually for you and your heirs,” he said.

That said, the rich and their defenders have realized they can’t oppose such a tax on the grounds (however true) that they want still more money, and the power and perks that come with it. Instead, they argue that taxing wealth will curtail the investment that America needs to keep its economy humming. “You’re going to completely disincentivize capital investment, which is going to be very, very bad for economic growth,” Treasury Secretary Steven Mnuchin (a multimillionaire) told the Times. Harvard’s Larry Summers, in an article co-authored with Natasha Sarin of the University of Pennsylvania Law School, argued that “[t]urning the tax code into a vehicle for confronting what some call ‘oligarchic drift’ would undermine business confidence, reduce investment, degrade economic efficiency and punish success.” Summers, however, didn’t explain how even with massive capital accumulation by the top one-tenth of 1 percent, and without a wealth tax, America had somehow lapsed into the “secular stagnation” he has long contended ails the nation’s economy—an ailment chiefly characterized by a deficiency in capital investment. Therein lies the rub: In fact, as wealth has concentrated to an unprecedented degree at the tip-top of the economy, investment has correspondingly declined. As one University of Chicago economist has , between 1984 and 2014 the share of income going to investment declined by 7.2 percent, the share going to labor declined by 6.7 percent, and the share going to shareholders rose by 13.5 percent. The rich are getting richer, that is, at the expense of investment. What ails the American economy is underinvestment, both private and public, in productive enterprises and facilities and in its workers. Warren’s and Sanders’ wealth tax proposals are anything but confiscatory—Warren’s calls for a 2 percent tax on wealth in excess of $50 million—but the proceeds from their proposed taxes could kick-start investment in our decaying roads, airports, schools, and grid, and in the new green infrastructure we desperately need.

It’s popular, powerful politics for a simple reason: higher taxes on the ultra-wealthy can pay for urgent, shared needs without overburdening anyone. Less than 1,000 Americans would pay a billionaire’s income tax. Only one-twentieth of the richest 1% would pay the annual tax on fortunes over $50 million. Taxes like these on billionaires and ultra-millionaires wouldn’t damage their quality of life—it certainly wouldn’t hurt ours—and no one who wasn’t already an ultra-millionaire would pay a cent under either policy. Taxing America’s wealthiest citizens is productive and patriotic, not punitive. Improved roads and railways, safer neighborhoods and high-quality schools in every zip code boost economic freedom and allow working people to build wealth of their own. Foundations bearing the names of billionaire families frequently advocate for government action on productive investments like , and . Taxing a fraction of the fortunes of billionaire families would pay for scaling the most effective solutions in a way that philanthropy cannot. For those worried about a backlash, trust us: There may be some whining and bluffing, but a wealth tax won’t hinder the drive of the wealthiest to invest in entrepreneurs. Ultra-wealthy people won’t renounce their citizenship en masse. Our family’s relative tax burden will still be light; billionaires’ will be manageable, to say the least.

(Eric, Wealth Tax: Definition, Advantages & Disadvantages TheStreet.com , lexis)

Purpose of a Wealth Tax The stated purpose of a wealth tax is threefold. 1. Create a Policy That Can Reach Wealthy Taxpayers Wealth tax advocates argue that income taxes are poorly structured to reach the wealthiest citizens. Unlike working and middle-class taxpayers, the highest earners typically make most of their money from investments and property holdings. As a result, it has historically proven difficult to write an income tax policy that can target the wealthy as effectively as it targets salaried and hourly workers. Wealth taxes allow policymakers to reach the assets of the wealthiest citizens more effectively, both increasing government revenue and making the system fairer. 2. Reduce Pools of Stagnant Wealth One of the problems with wealth concentration is that it encourages productive capital and property to go unused. When a taxpayer has millions of dollars, much of that money is likely to sit unspent in a bank account or an underdeveloped property. Wealth taxes would encourage people to spend and use their capital. If the money that sits in a bank account or third home will get slowly eroded by taxes, then the taxpayer's incentive is to spend and invest that money instead of letting the government seize it. Rather than having stagnant pools of useless capital, a wealth tax gets money moving, either by encouraging private investment or by letting the government spend it. 3. It Reduces Inequality The of Americans hold approximately a third of total net worth in the U.S., according to Federal Reserve data. Worldwide, the captured two-thirds of all new wealth worth $42 trillion created from 2020 to 2022, according to Oxfam. A wealth tax would reduce that. By targeting this directly, the government could slowly redistribute it. This would both fund programs that tax advocates support and would reduce inequality by reducing the holdings of the ultra-wealthy

The wealth taxes Democratic presidential candidates Elizabeth Warren and Bernie Sanders have proposed continue to provoke the malice of Wall Street, corporate Democrats, and now even other Democratic candidates running for president.

As I have written in People’s World ( and ), the intensity of the energy devoted to this criticism, combined with the lack of substance typically informing these critiques, is puzzling because the policies would impact, in the case of Warren’s proposal, only .1 percent of American households. The intensity seems disproportionate to the impact.

(David, A Wealth Tax; The Morning Newsletter The New York Times 10-28 lexis)

What are the pluses and minuses? Most Americans pay an annual wealth tax on their largest asset. It’s called property tax. Each year, they pay an amount equal to a small percentage of the estimated value of their house, and a house is by far the most valuable item that most families own. The very rich are different. While they pay property taxes too, their homes tend to make up a tiny share of their net worth. The bulk of their assets are not taxed. In past decades, other taxes — like the corporate tax (the burden of which falls on stockholders) and the estate tax — served almost as de facto wealth taxes. But those other taxes have declined, causing the total federal tax rate on the wealthy to plummet: Over the same period, wealth inequality has soared: Today, the wealthy both own a much larger share of the country’s assets than they once did and pay less tax on each dollar of assets. This combination creates problems for everybody else. Many Americans own only modest assets, and the federal government struggles to raise enough tax revenue to pay for society’s needs, like education, health care, transportation, scientific research and the military. This week, Senate Democratic leaders proposed a solution, in the form of a new kind of wealth tax. People with at least $1 billion in net worth or $100 million in annual income would be taxed each year on the increase in the value of many of their assets. The fate of this specific tax is uncertain, after Senator Joe Manchin expressed skepticism of it yesterday. But wealth taxes — which also featured in the 2020 Democratic presidential campaign — will probably remain part of the political debate in the years ahead, given the country’s level of inequality. Today, I want to evaluate the most common objections to wealth taxes. Some are stronger than others. 1. They’ll destroy the economy This is probably the weakest empirical argument against a wealth tax. It’s a version of the same case that opponents of tax increases on the rich always make. And it has a very poor historical record. When taxes on the rich were much higher than today, in the decades just after World War II, the economy boomed. Since the 1980s, high-end taxes have plummeted, and the U.S. economy has struggled: Economic growth, incomes for most people and other measures of well-being (like life expectancy) have stagnated since the 1980s. One exception was the 1990s — after Bill Clinton had raised income taxes on the rich as well as the corporate tax. Teasing out cause and effect on these issues is difficult. But there is no good evidence that low taxes on the wealthy help the larger economy.

Consumer confidence surveys are key indicators into the overall health of the economy. When people feel confident about the stability of their incomes it influences their spending and saving activities.

Therefore, reports such as Consumer Confidence Index (CCI) and University of Michigan Consumer Sentiment (MCSI) are of particular interest to traders since these reports include inflation expectations and outlooks for consumers.

Consumer spending is the key to any market economy. On the airwaves, there's never a shortage of data, analysis, and cable commentary regarding consumer behavior. So what are the  in a good economy? How about in a bad economy? There is no doubt that consumer spending is the most vital component of any economy. Why? Depending on the economy's sheer breadth, consumer spending can range anywhere from 50% to 75% of  (GDP).

In the U.S. this percentage is about 65% of total GDP.1 The first part of measuring total consumption is measuring consumer sentiment, which is derived completely from a consumer's standpoint. This article will recap the vital economic indicators of overall consumption, outlining what trends to look for and when to look for them.

Today’s New York Times came up with a scoop. In a  that ran on the front page, the paper reported that the rich don’t like wealth taxes—which are key platform planks for Senators Bernie Sanders and Elizabeth Warren.

That said, the rich and their defenders have realized they can’t oppose such a tax on the grounds (however true) that they want still more money, and the power and perks that come with it. Instead, they argue that taxing wealth will curtail the investment that America needs to keep its economy humming.

Every year, and especially during holiday-shopping season, we hear the familiar refrain: "What the consumer does is the most important thing."

"If shoppers stop spending, we're in big trouble."

The Consumer Confidence Index is a child of its time. Established in 1967 by US business association , it was developed in response to the first slowing of the post-war economic boom. As the momentum of growth could no longer be taken for granted, it was necessary to understand and monitor its drivers more clearly, in order to codify what might be called a theory of change. As consumption became an increasingly significant part of the economy, the model was simple: if more consumption increased GDP, boosting people’s confidence to consume would be a powerful leading indicator of growth.

The structure of the indicator was equally simple: a short survey of subjective perceptions, administered monthly across a nationally representative sample, covering the state of the national and local economy, personal financial situation, and intent to spend or save. It would swiftly prove a powerful barometer to inform business decisions, and an early response metric for government policy interventions.