Tech entrepreneur and Democrat presidential hopeful Andrew Yang said on Tuesday at the Democrat debate that rival Sen. Elizabeth Warren’s (D-MA) wealth tax has failed in other western countries that have tried it.
Yang said he agreed with Warren that we are living in the most “winner-take-all economy in history.”
“And a wealth tax makes a lot of sense in principle,” Yang said. “The problem is it’s been tried in Germany, France, Denmark, Sweden, and all those countries ended up repealing it because it had massive implementation problems and did not generate the revenue that they projected.”
“If we can’t learn from the failed experiences of other countries what can we learn from?” Yang said. “We should not be looking to other countries’ mistakes. Instead we should be looking at what Germany, France, Denmark and Sweden still have, which is a Value Added Tax.”
Then Yang suggested those taxes would come from American corporations and other businesses.
“If we give the American people a tiny slice of every Amazon sale, every Google search, every robot truck mile, every Facebook ad we can generate hundreds of billions of dollars and then put it into our hands because we know best how to use it,” Yang said.
National Review reported on the countries that have indeed repealed their wealth tax.
Wealth-tax supporters do not seem concerned about the likely damage to economic growth. But they should know that from a practical standpoint, wealth taxes in other countries have raised little money and have been a beast to administer.
More than a dozen European countries used to have wealth taxes, but nearly all of these countries repealed them, including Austria, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, the Netherlands, Luxembourg, and Sweden. Wealth taxes survive only in Norway, Spain, and Switzerland.
Before repeal, European wealth taxes — with a variety of rates and bases — tended to raise only about 0.2 percent of gross domestic product in revenue, based on Organization for Economic Cooperation and Development data. That is only 1/40th as much as the U.S. federal income tax raises.
Leftist economist and political commentator Robert Reich tweeted about VAT after Yang’s remarks and how it would hurt lower income Americans.
Can we get this straight? A VAT — value added tax — is a sales tax on every stage of production. A sales tax is regressive. It takes a bigger bite from lower-income pay than from higher-income. A VAT is the most regressive system of all.
— Robert Reich (@RBReich) October 16, 2019
Can we get this straight? A VAT — value added tax — is a sales tax on every stage of production. A sales tax is regressive. It takes a bigger bite from lower-income pay than from higher-income. A VAT is the most regressive system of all.
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