Some Democrats seem to have no problem raising the cost of capital. Dividend taxes rates are scheduled to triple, while capital gains rates will only increase by a mere 60 percent. But as a I poke around the liberal idea factories here in Washington, I am hearing more and more about wealth taxes on the wealthy, just like they have in Europe.
This goes far beyond estate and property taxes. In theory, even portfolios would be taxed on paper gains, from 1 percent to 3 percent. If applied to just the top 1 percent of taxpayers, such a tax could theoretically raise $300 billion in new revenue. Assuming, of course, all those rich folks didn’t hightail it to tax havens abroad. (Just ask Gov. Chris Christie of New Jersey about capital flight in the fact of high taxes.) No wonder so many nations want to crack down on these pockets of economic freedom.
I would dismiss the idea as nonsense if it were not for the fact that Democrats a) constantly complain about U.S. income inequality, b) seem so cavalier about cranking up taxes on wealthier Americans and c) think boosting taxes is the only way to deal with the budget deficit.