Should We Implement a Wealth Tax?

WHY IT MATTERS: According to the Federal Reserve, income and wealth inequality in the United States is on the rise. This fact has been highlighted by several 2020 presidential candidates, who believe that wealth is too highly concentrated at the top. One proposal to redistribute wealth from the top earners is a wealth tax (there are currently several versions of this tax being suggested). While most taxes hit a flow of money (like when you earn money via an income tax or when you buy a product via a sales tax), a wealth tax hits stagnant money, such as business assets, personal belongings, etc.

This article explores the pros and cons of the Wealth Tax -- which would tax the wealth of individuals whose net wealth totals $50 million or more. The proposal has become particularly newsworthy as 2020 presidential candidates have openly debated the policy with several billionaires, including Bill Gates and Mark Cuban.

THE COMMON THREAD: Both sides believe that the tax system should be equitable and promote growth.