THE WEALTH TAX – IT’S POSSIBLE – EVEN FAIR

PREAMBLE: It's fair; it's reasonable, but still, I don't like it.  

Did you know that we already have a form of wealth tax? It is called the property tax, sometimes referred to as the school tax. This tax is based on the value of your home. Typically, you pay a low, fixed rate per thousand dollars of assessed value. The calculation is simple: multiply the tax rate by the value of your property.

If you rent, you are not exempt. You pay this tax indirectly through your rent. You also pay it when you stay at a hotel or motel, and even if you live in a tent on land you own, you still pay property tax on that land.

Many people object to proposed “wealth taxes,” sometimes suggested at rates as high as 5 percent of net worth. Yet policymakers often overlook the fact that a wealth tax already exists in a familiar and politically accepted form. If structured carefully, such a tax could be expanded in a way that would generate additional revenue while limiting opposition to only the wealthiest individuals. Claims of unfairness would likely fade with little public attention.

The key is to make the tax rate proportional to property value but increasing as the value rises. In other words, the rate itself would scale upward with higher property values. This concept is best illustrated graphically. A straight line would represent the current system, where taxes increase linearly with property value. A curved line would represent a sliding-rate system, where higher-value properties are taxed at progressively higher rates.

By adjusting the curvature of this line, a county or school district could raise it to whatever revenue it needs—without provoking headline-grabbing controversy. The tax would remain firmly anchored to property values, a long-established and widely accepted measure. There would be no need for subjective or intrusive valuations of cars, artwork, or other difficult-to-assess assets. After all, this is how we all pay Federal income taxes.