In a written debate for Democracy, a Journal of Ideas, PPI’s Ben Ritz debates the question: should billionaires exist? In his responses, Ritz argues for a pragmatic approach to reduce inequality in America, rather than a large wealth tax designed to tax billionaires out of existence.
Ritz acknowledges that inequality is a major problem in America, and that we need new laws to prevent wealthy Americans from wielding unfair political influence. But he also stresses that billionaires are not responsible for every problem in American society, as his opponents all but assert. By blaming billionaires for issues like climate change and housing affordability, activists distract from real solutions to those problems
Furthermore, implementing a wealth tax to combat inequality would have enormous unintended consequences. In countries where they have been tried, wealth taxes have been difficult to enforce, leading to astronomical rates of tax evasion. Furthermore, wealth taxes damage the economy by incentivizing wealthy Americans to spend down their fortunes, rather than investing in the American economy. These incentives would slow economic growth and reduce wages for working people across America
Instead of focusing on an unrealistic wealth tax, Ritz calls for real solutions to reduce inequality in America. He recommends that lawmakers raise the top tax rates for income and capital gains, close loopholes in the tax code, and implement a progressive inheritance tax to combat intergenerational wealth concentration. These pragmatic solutions would combat inequality, without destroying the economic system that made America one of the most prosperous countries in the world.
