America needs a true wealth tax: Here's our plan to tax the rich -- the really, really rich

[ck4829]

The danger that extreme wealth poses to democracy is ever-present, and the idea that it must be restrained is almost as old as democracy itself. In 1792, Thomas Paine wrote that the freedom of elections was "violated by the overbearing influence" of inherited wealth, and proposed an extremely aggressive wealth tax that would have put a hard ceiling on how much wealth a person could accumulate. Nearly a century ago, Supreme Court Justice Louis Brandeis famously observed: "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both."

Paine's plan to fix this problem was the right one: taxation. America's ever-increasing inequality has motivated recent tax proposals targeting the ultra-rich, but the primary purpose has been to raise revenue, with any reduction in our concentration of wealth being incidental. While we do not oppose any of those proposals, we believe America needs a tax designed exclusively for the purpose of addressing the threat that our extreme concentration of wealth poses to democracy.

To that end, we developed our proposal, the Oppose Limitless Inequality Growth and Restore Civil Harmony (OLIGARCH) Act, as a straightforward progressive annual tax on extreme wealth. But instead of being tied to an arbitrary amount of wealth, say $50 million, the tax would have four brackets based on a household's wealth compared to that of the median American household: 2% on wealth between 1,000 and 10,000 times median household wealth, 4% on wealth between 10,000 and 100,000 times median household wealth, 6% on wealth between 100,000 and 1,000,000 times median household wealth, and 8% on wealth over 1,000,000 times median household wealth. Currently, the threshold for taxation under our proposal would exceed $100 million.

Structuring a tax this way specifically targets the extreme concentration of wealth: The tax would wax and wane along with wealth concentration, rather than in response to legislative tweaking. It would automatically kick into high gear during periods of worsening inequality, when wealth at the top is increasing faster than wealth in the middle. But when the economy works for the middle class, causing median household wealth to increase and inequality to moderate to an acceptable level, the tax would taper off to near nonexistence. The tax would apply exclusively to those whose wealth, if allowed to grow unchecked, could be unhealthy for our society, and would ask much more from the ultra-ultra-wealthy than it does from those who are "just" ultra-wealthy.

https://www.salon.com/2022/07/10/america-needs-a-real-wealth-tax-heres-our-plan-to-the-rich--the-really-really-rich/