European wealth tax is not an example of how the US wealth tax will work

At least one thing is clear: the European wealth taxes of the past are not examples to follow. They kicked in at far too low a threshold – less than €1 million ($1.1 million) in the case of France’s impôt de solidarité sur la fortune – and were riddled with loopholes as a consequence. In the French case, a business owner was exempt as long as he or she did not sell the company. That led to successful serial start-up founders being taxed while sleepy entrepreneurs were not. And whereas a moderately wealthy French household’s financial portfolio could easily generate a negative after-tax return, the effective tax rate on the wealth of the country’s 100 richest individuals was a ridiculously low 0.02%.

As Saez and Zucman argue, a wealth tax should treat all assets equally and have a high enough threshold. Warren is proposing a 2% tax on wealth above $50 million. The equivalent threshold in Europe would probably be lower, but certainly not low enough to satisfy Thomas Piketty, who proposes in his  a 5% annual tax on wealth of $2 million. Whereas Warren wants to reform capitalism, Piketty would like to end it and eradicate private property as we know it.