Wealth tax is an unconstitutional expansion of federal power. Lieawatha Warren has been throwing her weight behind a “wealth tax.” It is one way she plans to expand federal power. She does not want to pay down our debt or to balance the federal budget. She plans to partially fund more new programs. Things like Medicare-for-all and free college tuition.
Bad tax policy
Unlike an income tax, a wealth tax would levy a tax on a person’s net worth. If your total assets are beyond the threshold you will pay tax. Based on the cumulative value of your assets you will owe tax to the federal government. You might be making no money, but have assets in your business like a farm. You could have no cash but you would owe tax.
What are you supposed to do sell your business to pay your taxes? What kind of a brain dead idea is that? Where does the government get money to pay the bills next year? It’s a blatant attempt to grow the federal coffers. It is an attempt at implementation of expensive programs that many Americans don’t want.
But at least it’s unconstitutional
But there’s another problem: it’s also unconstitutional. Constitutional scholar Prof. Rob Natelson explained why in a recent article on The Epoch Times. He specifically analyzes Sen. Elizabeth Warren’s wealth tax. He questions why lawyers signed a letter supporting her plan: The Constitution distinguishes between direct and indirect taxes. Indirect taxes must be uniform throughout the country. Congress must impose the same tax rates on citizens of all states.
But Congress must draft direct tax laws so their revenue is “apportioned” among states by population. Because wealth varies among the states, federal direct tax statutes must feature different rate schedules for each state. The 16th Amendment waived that requirement for income taxes, but not for other direct levies.
Warren’s proposed wealth tax is a classic example of a direct tax. However, it would impose the same rates everywhere without regard to state boundaries, thereby violating the Constitution’s “apportionment” mandate.
Why, then, would law professors sign letters certifying that her proposal is constitutional?
Click here to read the full analysis.
Money is power, and if our elected officials can invent new ways to tax American citizens, they’ll increase their power over our daily lives. Even people who won’t be affected by the wealth tax directly will be affected by the corrupt, inefficient government programs created by the additional revenue. Wealth tax is an unconstitutional expansion of federal power