The conservative groups have begun to voice concerns against the wealth tax proposed by the Democratic hopefuls, as the presidential primaries are around the corner. In a bid to obtain maximum outreach, the right-wing groups are releasing papers to support their claims.
The groups have said that the proposed plans of Democratic hopefuls, mainly Sens. Bernie Sanders and Elizabeth Warren, of taxing multimillionaires and billionaires with higher taxes will adversely impact the country’s economy. They have also claimed that the proposed plans will end up hurting more people than the ultra-rich.
Speaking further against the wealth tax plans proposed by the 2020 hopefuls, the groups also said that the voters will not back the Democratic hopefuls once they learn the potential consequences of proposed plans to tax multi-rich more than the normal people.
However, many political and financial analysts have begun to debunk the claims of these conservative groups. Moreover, it seems highly unprofessional for these conservative groups to make such claims without considering the three basic aspects of taxation, which are:
- Broaden the tax base,
- Tax items with inelastic demands, and
- Taxing those, who pay the least tax on utilities, more than the others.
Explaining these basic aspects and speaking in support of the proposed 2020 wealth tax, financial expert J. Bradford Delong said that the need to broaden the tax base is to ensure that the administration can meet the revenue target with the lowest possible taxes.
Explaining the need to tax items with the inelastic demands – items whose supply remains unaffected with the change in price – Delong said that the tax ensures that the twisted impact of the tax system on the larger grounds of economic activity is as minimum as possible.
Speaking further, he said that those “for whom the utility costs of paying taxes are the least”, in other words, the rich should be taxed more than the other citizens of the country. And, the broadest tax base to tax the rich, based on the three basic aspects of taxation, is to impose wealth tax on them.
Additionally, the conservative groups even tried to justify their claims of opposing the proposed plans of taxing the rich as per their wealth by releasing statements to the media. To support their claims they even took the support of the Penn Wharton Budget Model that said Warren’s proposal to tax the rich as per their wealth will reduce the GDP of the country.
Andrew Moylan, executive vice president of the National Taxpayers Union Foundation, also justified his support against the proposed plans of the 2020 Democratic hopefuls on the wealth tax. He said, “I think groups like ours and others are trying to sound the alarm that whatever the appeal [wealth taxes] have to people in certain subsets, they are likely unconstitutional, it’s an administrative disaster to figure out to implement, and it would have huge negative impacts not just on wealthy people.”
While the debate on the policy and its possible impact on the economy is considerable, the opposition to the policies solely based on winning the elections and misleading the voters with insignificant facts depicts how low the politics in the presidential elections can be, which is not really a surprise, considering the policies of the officials at the White House.