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Majority of Americans favor wealth tax on very rich - Reuters/Ipsos poll


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Majority of Americans favor wealth tax on very rich - Reuters/Ipsos poll

By Howard Schneider and Chris Kahn
ReutersJanuary 10, 2020, 5:24 AM CST

By Howard Schneider and Chris Kahn

 

WASHINGTON/NEW YORK (Reuters) - The idea of imposing a wealth tax on the richest Americans has elicited sharply divergent views across a spectrum of politicians, with President Donald Trump branding it socialist and progressive Democratic presidential contenders Senators Elizabeth Warren and Bernie Sanders prominently endorsing it.

 

But it may have broad public support, according to a Reuters/Ipsos poll that found nearly two-thirds of respondents agree that the very rich should pay more.

 
 

Among the 4,441 respondents to the poll, 64% strongly or somewhat agreed that "the very rich should contribute an extra share of their total wealth each year to support public programs" - the essence of a wealth tax. Results were similar across gender, race and household income. While support among Democrats was stronger, at 77%, a majority of Republicans, 53%, also agreed with the idea.

 

A wealth tax is levied on an individual's net worth, such as stocks, bonds and real estate, as well as cash holdings, similar in concept to property taxes. It is separate from an income tax, which applies to wages, interest and dividends, among other sources.

 

Asked in the poll if "the very rich should be allowed to keep the money they have, even if that means increasing inequality," 54% of respondents disagreed.

“Rich people have a right to blow their money on Lamborghinis and world-wide cruises or whatever,” said Esin Zimmerman, 53, a lifelong Republican from Madison, Minnesota, who wants higher taxes for the wealthy. “But that money could be used in other ways that help people.”

 

Zimmerman said she would especially be in favour of a wealth tax that would help pay for government programs for U.S. military veterans, or help single parents with young children. “It could put the border wall up,” she said.

 

The results may reflect how the economic changes of the past roughly 20 years, from globalisation to the financial crisis, have shaped attitudes about economic policy.

According to polling by Gallup, concerns about the rich paying too little actually declined through the 1990s and early 2000s, a relative boom period for the United States. But the concerns have been climbing since the crisis years of 2007 to 2009, from 55% to more than 60% as of 2016.

 

The Reuters/Ipsos results suggested even stronger support for an annual levy on total wealth, not just income. Warren and Sanders have touted the idea as a way to help pay for major social programs like Medicare for All and to reverse a stark rise in the share of wealth owned by the very richest Americans, known as the "1 percent."

The poll also points to changing attitudes toward basic ideas such as “keeping what you earn.”

 

That notion, central to a winner-take-all brand of capitalism, got mixed reviews. While 56% of Republicans agreed the very rich should keep what they have regardless of the impact on inequality, 35% of Republicans disagreed with the statement, as did 71% of Democrats.

 

Republican survey respondents interviewed by Reuters said they did not see their support for a wealth tax conflicting with their party ideals or their support for Trump.

Kathy Herron, 56, a Republican who lives in Santa Rosa, California, said her support for Trump - a self-proclaimed billionaire - stems from his hardline policies on illegal immigration. In her view, the president would do well to support higher taxes on rich Americans. “We’re taxed from one end to the other, and it just seems the rich don’t pay their share," she said.

 

In recent years in particular, mainstream economic institutions like the International Monetary Fund and the Federal Reserve have taken seriously the possibility that high levels of wealth and income inequality may be not just politically corrosive, but bad for economic growth.

 

At the most recent Fed policy meeting, staff members presented research on how families' differing access to credit might make a recession worse — the sort of exercise that shows how unequal starting points among households can influence national outcomes.

 

Economic and market trends have likely reinforced doubts about who gets ahead, and how fast. Since the start in 2009 of a now-decade-long recovery, the top 1 percent's share of national net worth has grown from 27.8% to 32.2%, driven by a record-setting boom in the stock market, according to Fed data.

Trump has cited the rise in equity markets as a selling point in his campaign, which is centred on taking credit for historically low unemployment, and a tariff-heavy trade policy that he says will restore manufacturing jobs.

 

But that has not changed the country's wealth picture. While the share of wealth held by the bottom 50% of Americans has increased since the crisis, to 1.5% percent, longterm the trend is down, with their share at less than half what it was in 1989. The shares of wealth held by the middle and upper middle classes - or all other Americans save for the richest 1 percent -- have all fallen since the crisis.

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As the economy expanded due to information technologies, rich people got richer, while their tax rate went down and government spending went up. Time to pay the piper.

 

Here's how to limit it: tie it to the national debt and to the country's infrastructure. If the infrastructure is good and the debt very low, reduce the wealth tax to nothing. If infrastructure is crumbling (it is) and debt is high (it is), tax the f*¢k out of them. Then watch how fast infrastructure is repaired and the debt paid off.

 

One more thing: universal healthcare should be part of infrastructure.

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58 minutes ago, laripu said:

As the economy expanded due to information technologies, rich people got richer, while their tax rate went down and government spending went up. Time to pay the piper.

 

Here's how to limit it: tie it to the national debt and to the country's infrastructure. If the infrastructure is good and the debt very low, reduce the wealth tax to nothing. If infrastructure is crumbling (it is) and debt is high (it is), tax the f*¢k out of them. Then watch how fast infrastructure is repaired and the debt paid off.

 

One more thing: universal healthcare should be part of infrastructure.

Right on Laripu!

I think that is intuitive thinking. The high value loophole through years and years of GDP growth has not shone up in the average peoples lives. Yes, more folks have smart phones and big televisions, however, where's the efficient mass transit, healthcare, educational needs of a rich country gone? We now have a stock market that has as of late ballooned, but we know it could drop, hold your breath 401K low to middle class people, and what then, there goes your retirement you lucky ones? For the wealthiest, eh, not so much.

 

Where's the bread in educational cost? What about dealing with climate change, the seemingly implicit cost of fossil fuel usage compared to the soon to be if not already experienced explicit cost that will really reek its ugly toll on younger generations. It isn't in fixing Social Security by a long shot. 

 

Going Green pays dividends, creates jobs, resurrects the idea of investing into the future. On a personal note, just came back from three weeks in Japan staying in Osaka and Tokyo, 

where people are proud, and the cities are clean, and mass transit is excellent. Well yes, in Japan they have debt, but as a payment on debt it's ridiculously low. And oh, btw, their GDP growth while lower than that in the US, continues to put the citizens in good shape - and talk about a problem regarding age demographics, Japan is working less hours with an even older age population than what we have in the US. 

 

Implicit in our politics is the explicit lack of economic fundamentals of our citizenry. And that is a huge hurdle to overcome.

 

Peace!

 

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16 minutes ago, TheOldBarn said:

On a personal note, just came back from three weeks in Japan staying in Osaka and Tokyo, 

where people are proud, and the cities are clean, and mass transit is excellent.

 

That must have been interesting! They only place in Asia I've been was South Korea in 1998 for two months. It was interesting, but I'd bet that Japan was much more interesting.

 

I'd add one more thing to infrastructure. When roads were first being built, there was lawlessness, and therefore it was necessary to add state police and FBI to police them. That's where we are with the internet. We need internet police for the lawlessness we find there.

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2 minutes ago, laripu said:

 

That must have been interesting! They only place in Asia I've been was South Korea in 1998 for two months. It was interesting, but I'd bet that Japan was much more interesting.

 

I'd add one more thing to infrastructure. When roads were first being built, there was lawlessness, and therefore it was necessary to add state police and FBI to police them. That's where we are with the internet. We need internet police for the lawlessness we find there.

great point about the US infrastructure. The Internet isn't regulated. I think it's unregulated capitalism gone mad. Same with the roads and lack of mass transit. 

 

Japan hits you on the head regarding the politeness of the people. And they are not dumb. Interceded in rows and rows of commerce even in narrow streets, everything is clean. You can walk to work or take the subway, or ride a bike safely. Osaka and Tokyo are big cities even a country boy like myself could learn to love. 

 

But that's just one country. I am so misguided I think whenever I get a chance to travel. We have to stop contributing to war and work toward efficiency, and no, not utilitarianism. We need art

to help save our collective individual souls. 

 

You get it Laripu. I think we are going to get there some day. I think we need to change the narrative - and I don't mean by spreading misinformation. 

 

Peace!

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