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Billionaires denounce idea of wealth tax, but it could work: Opinion

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A couple of decades ago, it would have been unthinkable.

A “wealth tax”?

It would have sounded deeply un-American.

But now, after 4 decades of tax policies designed to reward investors and owners, America has the greatest wealth inequality since the so-called “Gilded Age” of the 1920s. And the idea of a wealth tax is actually popular!

According to a recent poll, more than 60% of registered voters support the wealth tax proposal put forth by Presidential candidate Elizabeth Warren. Just as startling, this support includes half of Republicans!

Warren’s proposal would tax the wealth of only the richest Americans — those with assets of $50 million or more.

These folks would pay a tax of 2% per year on assets between $50 million and $1 billion, and 3% on assets over $1 billion.

Only about 75,000 American families are rich enough to qualify for that. But they’re so rich that the tax would generate revenue of an estimated $2.8 trillion over a decade. That would help reduce our massive government spending deficit.

Of course, billionaires have already denounced the idea. Starbucks billionaire Howard Schultz called it ridiculous. Bloomberg billionaire Mike Bloomberg said it was unconstitutional.

That’s hardly surprising. No one wants to pay more taxes.

But don’t fall for the arguments you’ll hear about how a tax like this would remove the incentive to work.

A 2% tax on assets over $50 million still leaves you with more than 98% of your wealth. And if you’re upset about losing that 2%, you actually have an incentive to work harder to earn it back.

Compared to the tax policies we’ve had for the past few decades, a wealth tax is a radical idea. But our current policies have led us to the situation we’re in now — in which the US economy only works well for the richest Americans.

We need to make our system work for everyone. If a wealth tax helps us do that, then let’s consider it.

Watch the latest episode of “BI Today,” in which INSIDER CEO Henry Blodget discusses what a wealth tax would mean for the economy »

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