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I mean, so what if a wealth tax took half of American billionaire wealth over the next decade or so? Or what if it took more? All these folks would still have plenty left to spend — which is why some democratic socialists would prefer a much, much lower wealth cap. As a policy adviser to Rep. Alexandria Ocasio–Cortez has said, “If you have $5 million, you can live off the interest of that and be a one-percenter. There’s nothing in this world that anybody wants or needs to do that you can’t do with, let’s say, $10 – 15 million.”
Nor should we worry that vast wealth confiscation would hurt innovation and entrepreneurship — what economists Emmanuel Saez and Gabriel Zucman call “extreme business success.” Most rich and successful entrepreneurs would be, well, still rich and successful entrepreneurs before getting hit by the billionaire tax. As the two inequality researchers put it, “Established businesses typically devote a lot of their resources to protect their dominant positions by fighting new competition. A progressive wealth tax hits wealthy owners who have already established their businesses while it does not affect (yet) new emerging businesses.”More