On Wealth Taxes

Early today, a friend posted a link to a video in which Abigail Disney calls for a wealth tax.

After some back and forth on taxation in general, he asked “You truly believe that taxes will destroy the engine that creates wealth?”

Here is my reply:

Specifically wealth taxes, yes they do. You are incorrect in thinking people will create more without the incentive to do so. Look no further the East and West Germany and the Trabant vs BMW/Audi/Mercedes. Did the East Germans have less need? By your logic, they must have.

In addition, one only creates wealth for oneself by creating wealth for others. This is not me just saying this, but it is rather the work of William Nordhaus who won the Nobel prize in economics partially for his work on the subject of wealth creation.

His peer-reviewed work demonstrates that entrepreneurs (i.e., wealth creators) create 49 times the wealth than the amount they keep. In other words, Jeff Bezos created Amazon creating about $200 billion for himself. Meanwhile, about $9.8 trillion was created in the overall economy.

As far as I know, he has coerced not a single person to buy from him. I firmly believe without his contributions in the last two decades there would be NO "shelter-in-place." For one, how would we obtain much of the stuff we buy, and second, our society as a whole would be far less wealthy and we could not afford to do what we have done.

Bezos in creating Amazon has saved lives! And while he has $200 billion am I, are you, or anyone LESS well off because of it? No, the exact opposite we are far more well off.

Wealth is not a zero-sum game!