One of the interesting things about the influence of Thomas Piketty’s best-selling book Capital in the 21st Century is that as widely acclaimed and discussed as the book is, very few people seem to endorse Piketty’s actual policy recommendation that we should remake the tax code to feature a progressive net wealth tax.
Even Elizabeth Warren doesn’t want Piketty’s wealth tax
Elizabeth Warren, for example, has been vocal in her praise of the book as befits a Senator who’s both an intellectual heavyweight and a high-profile standard-bearer for the left-wing of the Democratic Party. But when Michael McAuliff from the Huffington Post asked her about the wealth tax idea, she ducked:
“I want to put it this way: We need to take a hard look overall at our approach to taxation,” Warren said. “That includes every part of it -- [the tax code] has become so riddled with loopholes and exceptions that were lobbied in by powerful corporations and individuals with buckets of money. You don’t want to start with any one part of it, because that isn’t the point. The point is the whole thing has to be on the table at once.”
What you’re seeing here is that Piketty’s work is actually less in line with the Democratic Party policy agenda than a lot of the superficial reaction to it would suggest. Both Democrats and Piketty are very interested in rising income inequality in the United States, but the Democratic platform of higher income taxes to fund a more expansive welfare state is not the same as Piketty’s proposal for a reform aimed at taxing the accumulated fortunes of the very wealth to reduce the tax burden on the middle class.
They’re somewhat similar in spirit, but Warren is a senator and when the legislative rubber hits the road these are very different ideas. Among other things, closing tax loopholes is definitely something the IRS could do if Congress told it to, while administering Piketty’s wealth tax would be a serious logistical challenge.
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