According to The New York Times, Democrats Alexandria Ocasio-Cortez and Elizabeth Warren both have similar arguments to address social security issues: tax the rich. Ocasio-Cortez proposed that a wealth tax can help fund programs such as climate change initiatives. In her version of the plan, earnings that exceed $10 million should be taxed a rate of 60% or 70%. This is a big leap from the 37% the wealthy currently pays.
Warren’s plan includes imposing a 2% rate on individuals with net worth over $50 million, while those with more than $1 billion net worth will be taxed 3%. Experts foresee a $2.75 trillion funding for 10 years due to this plan.
Unfair, say critics
The Street outlines criticisms against the idea of a wealth tax. Critics say that this is unfair as it would duplicate the tax paid by the rich. The Streets explains that wealthy individuals would be paying for the ‘same money’ every year or what is called double taxation, which earned the dislike of some critics. According to critics, taxpayers should have the rights to their riches without intervention from the government.
Other arguments against the proposal include the possibility of discouraging work and encouraging wealth relocation, as well as the difficulty that comes with collecting it.
‘Better than some of the alternatives’
Bloomberg’s Noah Smith says that these proposals are better options than imposing an inheritance tax. Smith explains that this seems fairer than income taxes, as well. The proposal has the potential to increase productivity by encouraging the rich to invest their money in an efficient and productive manner, as opposed to having it stagnate or become unproductive capital.
These clashing perceptions are just some of the views surrounding the controversial plans. With more buzz generated by this proposal, people are participating in nation-related discussions.