Is A Wealth Tax Practical?

It makes sense to discuss whether a national wealth tax will be able to accomplish its goal. Andrew Yang is worried that there will be a flight of wealthy people out of the USA if a wealth tax is implemented.

YouTube has the video Panel: Yang vs Warren on Wealth Tax.

Sophia Loren and Carlo Ponti may be the most famous example of people who fled their country, Italy, and did not dare to return because of the wealth tax they refused to pay. Forbes has the article Sophia Loren Jailed In 1974 Tax Evasion, Finally Wins Case to catch you up on the details if you don;t know this story.

On the controversy over whether a wealth tax would drive wealthy people out of the USA, there is an important element missing from the discussion. It is not true that there is nothing that can be done about the possibility of the flight of wealthy people. There has been international cooperation among countries to come to agreement on synchronizing tax policy to prevent flight to tax havens. True that George Bush took us out of those discussions, but those discussions can be restarted by a new administration. The candidates ought to address this issue before they lose the debate on Yang’s false premise that nothing can be done.

The wealth tax is just one example of the need for international cooperatioin in solving the problem of wealth and income inequality. This issue is just one of many issues that could stand a good dose of international cooperation. We need a President that can help lead the world into an era of international cooperation. We also need a person to lead us who knows when to stand up for the sovereignty of the USA. Unlike Bill Clinton and Barack Obama who were willing to cede our sovereignty to get trade deals the multinational corporations wanted.

See the conservative National Review article Don’t Overstate the TPP’s Infringement on American Sovereignty.

The expansion of trade agreements into new policy areas has been controversial, but it is now firmly entrenched. Labor, the environment, intellectual property, and other policies have all become core parts of trade deals. As with tariff commitments, these rules are enforceable, which means that if one country believes another is not complying with its obligations, it can bring a complaint.

The loss of sovereignty in such instances is greater than that inherent in tariff commitments, as it affects domestic policymaking more broadly. We need to be careful, however, not to exaggerate the scope of the power of trade agreements and their accompanying institutions.

Of course, this loss of sovereignty is much more severe than this article admits to. I just couldn’t quickly find an article that gave examples of the harm this sort of agreement has already done.

Upon further search, I did find an article. This isn’t the specific example I was thinking of, but perhaps it will do. See the article in The Dreaded New York Times First a Gold Rush, Then the Lawyers.

But when the government of El Salvador, facing mounting public concern over the consequences of mining, failed to grant the company the final permit it needed, Pacific Rim sought to extract a different kind of green: $77 million from the nation’s treasury as compensation for lost profits.

Pacific Rim is suing the Salvadoran government in an international investment court, one of scores of cases in recent years in which frustrated oil, gas and mining investors, using provisions of trade agreements, have sought to recoup losses from mostly developing countries.

Here is an example where cooperation among countries can make things worse. However, if countries cooperate on progressive ideas, I believe they can make things better. It all depends on what the citizens of these countries will allow their governments to do. Participating in politics cannot begin and end at the ballot box. Political vigilance is a full-time necessity.

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