From Massachussetts Democratic Senator Elizabeth Warren’s proposal to tax wealth (although some would credit Vermont Independent Senator Bernie Sanders) to New York Democratic Rep. Alexandria Ocasio-Cortez’s proposal of sixty to seventy percent top income tax brackets, taxing the rich is all the rage on the political left these days. There’s no doubt these sort of ideas are popular among Americans.
But it’s worth pointing out that they one of America’s biggest problems is not raising a relatively small amount of revenue from taxing extremely high tax brackets. The problem is that our states and cities are generally revenue-strapped because the average American pays very little in taxes.
As you can see from this graphic from the Tax Foundation, pretty much every country the political left really likes asks its average worker to pay far more in taxes than America does — because that’s the only way you raise a significant amount of revenue to pay for services.
The wealth tax Warren’s advisers discussed, for instance, would raise less than $3 trillion in ten years, and that’s provided that the government can actually enforce it. Tax avoidance is an art (or more accurately, an industry) in America. That’s less than a year of federal spending right now, and the left generally wants a lot more federal spending.
There’s a separate argument to be made that taxes are a check on inequality, but there is an equally strong argument to be made that tax policy is not a very effective check on inequality compared to labor unions.