How do you avoid violent redistribution of wealth?: Property rights defenders
New to tax policy
What you own is yours
In 1215, the barons forced King John to seal the Magna Carta. The clause that mattered: no freeman shall be deprived of his property except by lawful judgment. The Fifth Amendment codified it. Eight centuries of legal tradition rest on the proposition that what you own is yours until a defined process says otherwise.
I watch the other three groups and I hear the same sound from each: people reaching for someone else’s assets and calling it justice.
The redistributionists propose a 2 percent annual wealth tax on net assets above $50 million. Consider the principle. A wealth tax is not a tax on income or transactions. It is a tax on existing — on the fact of having. You accumulated this through means the law permitted, and now we take a percentage annually because you have it. That is confiscation on an installment plan. Hayek warned that the road to serfdom begins with eroding property rights in the name of welfare. The erosion does not arrive as a seizure. It arrives as a rate.
The gradualists want higher marginal rates and closed loopholes. Some proposals are defensible — the carried interest loophole is rent-seeking. Close it. But the agenda extends to universal services funded by rates that transfer productivity’s fruits from those who produced them to those who voted for the transfer.
The structural reformers frame the land value tax as a user fee. The substance is a tax on property its owner legally acquired. A homeowner in Austin who bought in 2010 for $250,000, now on land worth $800,000, did not steal the appreciation. She lives there.
The economy grows best when property is secure. Hernando de Soto, the Peruvian economist who studied why poor countries stay poor, demonstrated that the primary obstacle to development is not shortage of wealth but shortage of formal property rights.
Where we concede ground: The political feedback loop is real. When donors effectively purchase legislative outcomes, the market is captured, not free.
What would change our mind: Full redistributionist toolkit deployed for twenty years with no decline in GDP growth or business formation.
Read the full synthesis: How do you avoid violent redistribution of wealth?