You have to hand it to Sen. Bernie Sanders, I-Vermont. Ever since being beaten for the Democratic presidential nomination by Hillary Clinton, he has been on a roll. First, he proposed seizing control of healthcare by the government in his “Medicare for All” bill. Now, according to Hot Air, Sanders has trotted out that socialist oldie but goodie known as a Wealth Tax. Before he is hustled off to the afterlife, where everyone is equal, Sanders will likely call for nationalization of industries, such as the airlines, the oil companies, and the high-tech companies like Google and Apple.
What is a wealth tax?
A wealth tax is different from an income tax in that it is a tax on assets. Essentially, the government tallies up all of your assets, your house, your savings and investments and so on and demands that you fork over a set percentage of the value. Under a socialist regime, such a tax is designed to prevent the concentration of wealth in private hands. The government can then redistribute the money as it sees fit. From each according to their means, to each according to their needs, as determined by the state, of course.
Why is the idea a bad one?
Anyone with a modicum of knowledge of basic economics understands why a wealth tax is not a good idea. Private individuals accumulate wealth by producing useful goods and services.
The more money they are allowed to keep, the more they produce. The economy grows, jobs are created and maintained, most everyone is happy.
Governments acquire wealth only by one method, by taking it at the point of a gun. They also tend to be inefficient and even, at times, corrupt when spending that money beyond the recognized functions of government.
The theory of 'From each according to his means and to each according to his needs' never works in practice. People with influence in the government always seem to get more and give less.
If wealth producers find themselves being fleeced too much by a government, they become adroit in hiding their assets, such as in overseas banks in countries with banking secrecy laws.
In the last extremis, people with assets desired by the country they live in can remove themselves from the sovereign reach of said country.
The more the socialism, the more this deadly spiral takes place. A country like France is a European welfare state with a perpetually rotten economy, but it can still function after a fashion. Greece, another country in the European Union, has gone further down the road and is currently in crisis. The end stage of Bernie Sanders’ socialist vision is Venezuela, which is teetering on the abyss.
