On Twitter Sen Warren has a video promoting her wealth tax. Her illustration is a person who inherited $500,000,000 but earns $50,000 a year. She says the person has yachts, planes, homes and more. Then she compares that person with a school teacher who earns $50,000 a year. Her point is they pay the same in taxes.
Good rhetoric indeed and an insult to common sense.
How many people do you know who have inherited $500 million? The fact is most of the wealth has been earned, not inherited, but even that’s not the point.
If that money was inherited somebody paid 40% in inheritance taxes. But think about this, such a person doesn’t have $500 million cash in a bank, if they have the planes, yachts, etc. they surely have paid taxes on that money as it’s converted from equity to cash and that means they have an income far more than $50,000 to keep that stuff running. Think about it.
A very small portion of the wealth of the super rich is liquid, the great majority is in business interests and the rest invested, mostly in stocks and bonds.
Her comparison makes no sense and is designed to create envy, a new sense of entitlement and to further divide Americans. She is creating new scapegoats to further her idealistic sounding agenda. Creating a scapegoat to gain the favor of the masses is not a new tactic, but we must have forgotten the lessons of the past.
If you have honestly accumulated a billion dollars, ten million dollars or $750,000, why is anyone else entitled to it? It’s easy to apply the wealth tax concept to billionaires, but what if it were on $1 million in wealth? The amount is not important, the concept is.