Rule Five Wealth Tax Friday

Fauxcohantas Warren is proposing a wealth tax to pay for all the Free Shit she proposes to hand out in the unlikely event she becomes President Imperator.  Here’s the problem:  She can’t. It’s unconstitutional..  Excerpt:

Whenever Sen. Elizabeth Warren, D-Mass., is asked how she’ll fund “free” college tuition and her many other promised goodies, she has a ready answer: a tax. Specifically, she wants the federal government to impose a 2 percent annual tax on accumulated wealth in excess of $50 million.

This is hardly a new idea. Of the 14 wealthy OECD countries with a wealth tax in 1996, 10 have since then abandoned it. With good reason: this wealth tax is economically destructive.

Even if it weren’t, a pure wealth or asset tax would be unconstitutional. Even CNN, in its fact-checking of Warren’s tax, couldn’t ignore this, noting “there are several procedural problems with the proposal, including its legality.”

Here’s why. States have a general “police power”— that is, a general authority to enact laws regulating private conduct—but Congress does not. Congress has only the specific legislative authority that the Constitution grants it, and the three relevant provisions do not authorize Congress to adopt a wealth or asset tax.

Article 1, Section 9, permits Congress to impose direct taxes on individuals if they are equally apportioned along with excise taxes and duties. The 16th Amendment permits Congress to adopt an income tax. That amendment is important because the Supreme Court had ruled that Congress previously lacked the Article I power to adopt an income tax.

Finally, Article 1, Section 8, permits Congress to adopt indirect taxes in the form of excise taxes on specific goods or transactions. Supreme Court precedent (see Knowlton v. Moore) explains that the estate tax is one such permissible indirect tax, because it is a duty imposed on a transfer of property predicated by death.

Bear in mind that the fact that a proposal is forbidden by the Constitution doesn’t stop politicians from touting this form of stupidity; Congress and the Executive Branch in particular have been using the Constitution as asswipe since about 1860.

But Liawatha’s proposal is especially egregious in its stupidity, not only for legal reasons but also moral and economic reasons.  The moral reasons are simple; a wealth tax, like any tax, is theft perpetrated by government, wherein government confiscates a portion of the citizenry’s wealth by force.  (If you don’t believe that, try not paying your taxes and see how long it takes the government to send men with guns out looking for you.)

And, as the lined article notes, several nations who have adopted wealth taxes have abandoned them due to the economic damage they caused.  Followers of the purveyors of envy like Chief Spreading Bull Warren seem to think that the wealthy keep their money in giant Scrooge McDuckian vaults so they can swim in gold coins; this is a canard.  The wealthy by and large have their assets out in the economy, invested in new ventures, funding new enterprises, new equipment, new facilities, new technologies.  That brings economic growth; that creates jobs.

Liawatha would damage all that in the name of handing out Free Shit.  That’s way to the left of stupid.