What is a 'Wealth Tax,' and is it Constitutional?
Summary from the AllSides News Team
This week, the Supreme Court heard arguments in a case challenging the American tax code.
For Context: The plaintiffs in Moore v. United States argued it’s unconstitutional for the federal government to tax profits that haven’t been realized. If this argument fails, it would establish precedent for a wealth tax, a tax on profits gained from investments but not yet converted into cash.
From the Left: A writer for Vox (Left bias) called the lawsuit “a preemptive strike on the very concept of wealth taxes” that, if victorious, could “blow a huge hole in the federal budget.” The writer concludes, “This is the very sort of process that should be conducted by elected officials, and not by black-robed lawyers.” A writer for Bloomberg (Lean Left bias) argued that wealth taxes are “terrible policy,” determining that a tax on unrealized gains would incentivize companies to remain private, which “deprives everyday Americans from the chance to invest in growing companies.”
From the Right: The Wall Street Journal Editorial Board (Lean Right bias) determined a ruling against the plaintiffs would “blow up the Constitution’s limits on Congress’s taxing power” and lead to a wealth tax on unrealized gains. The board argued the Supreme Court should rule in favor of the plaintiffs and “close the wealth-tax door.” A writer for the National Review (Right bias) argued a wealth tax would “impact charitable giving” and lead to “further encroachments on property rights, wealth accumulation, and even the assets of charitable foundations.”
Featured Coverage of this Story
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The Supreme Court will soon hear a lawsuit that seeks to kill a leading proposal to reduce wealth inequality in the United States, even before that proposal becomes reality.
During her 2020 presidential campaign, Sen. Elizabeth Warren (D-MA) proposed a 2 percent wealth tax on Americans worth over $50 million. The idea was that, rather than merely taxing very wealthy people’s income and leaving their accumulated capital intact, the new tax would gradually chip away at massive fortunes and start to bring wealth inequality under control.
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From the CenterOral argument suggests narrow ruling to uphold disputed tax
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From the RightThe Supreme Court and a Wealth Tax
You almost have to admire the big-government legal lobby. Sensing a threat to their designs for a wealth tax, they turned the runup to the Supreme Court’s Tuesday oral arguments in Moore v. U.S. into tax Armageddon.
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