Many on the political left are running a full-court press to defend their notion that a wealth tax is constitutional. Some are even claiming the rule of apportionment was just a mechanism to raise revenue and it wasn’t meant to handcuff Congress’s ability to reach for an individual’s wealth.
Supply side economic policies essentially gives workers and businesses the freedom to pursue income creation. This type of economic climate is most conducive for new wealth creation.
The Bernie Sanders’ website links to an American Bar Association article where the authors attempt to convince us that before the U.S. Constitution, all state taxes were considered federal direct taxes. Then, once apportionment became associated with direct taxes in the new Constitution, those taxes that couldn’t be easily apportioned were no longer considered direct. They became indirect.
I wrote in my previous article that we can define wealth as the saved monetary value from meeting demand.
Even the stocks you own that appreciate in value fit this description. Stock prices primarily go up when a company is meeting demand and has increased its earnings (unconsumed income). For the shareholder, the profit could be distributed or reinvested in the company to increase revenues. Either way, the increase in wealth for the shareholder represents the saved monetary value from meeting demand.
The previous article, Wealth is Created, leads us perfectly to this post.
Free market capitalism produces new wealth. To put it another way, the so-called wealth pie just gets bigger. The reason the wealth pie grows is because our economic system is based on equal transactions.
One of the greatest benefits for individuals living within free market capitalism is the method of wealth creation. The process starts when people are free to take something of value such as their labor and to exchange it for income within a marketplace.
Wealth tax advocates will be attacking the Supreme Court’s 1895 Pollock opinion which maintains that a tax on property is a direct tax.
They have to do so if they want to enact a wealth tax because for the last one and a quarter century, Pollock has protected Americans’ private property from government mobsters.
The Bernie Sanders for President website, not surprisingly, advocates for a wealth tax. He says a wealth tax would be Constitutional and uses several articles to support his view written by legal experts.
It was the nation’s first judicial review case; Congress had passed the Carriage Tax bill. The luxury tax would be imposed yearly on all owners of passenger carriages. The issue to Daniel Hylton, who owned 125 of such vehicles, was he believed it to be a direct tax requiring apportionment. So, Daniel sued.
Despite what you may have heard, a federal wealth tax would be defeated at the U.S. Supreme Court. Such a tax is a way of taking accumulated wealth from those who have too much as determined by government policy makers.