According to the GREAT AMERICAN PATRIOT Thomas Paine, a wealth tax is the only way to attain TRUE FREEDOM!!! 🦅🦅🦅

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.