Public investment benefits from a wealth tax far outweigh decreased profit incentives
Steve Wamhoff 10-2-2019, Director of Federal Tax Policy, ITEP, "How a Federal Wealth Tax Can Help the Economy," ITEP, 10-2-2019, https://itep.org/how-a-federal-wealth-tax-can-help-the-economy/,LMS
Rich people changing their behavior in response to a tax increase is likely to be negligible compared to the benefit of public investments that could be financed with the revenue.
The Times article quotes a piece from former Treasury Secretary Lawrence Summers and law professor Natasha Sarin arguing that too aggressively targeting the rich with tax increases would “degrade economic efficiency and punish success in ways unlikely to be good for the country.” But the good of the country is not served when millionaires fail to pay for the public investments that allow them to get rich in the first place.
Sen. Bernie Sanders’ proposed wealth tax only applies to net worth in excess of $32 million, while Sen. Elizabeth Warren’s wealth tax would apply only to net worth in excess of $50 million. It is difficult to believe that as people see their wealth approach these thresholds they will stop working or investing in numbers significant enough to outweigh the positive impact of the public goods that can be produced with the revenue raised.