Oxfam added that an annual wealth tax on millionaires of two per cent, and five per cent for billionaires, could generate US$2.52 trillion a year.
Estimates on how many American’s have assets of $1 million or more vary greatly, in part because
- some measure number of individuals
- some measure number of households
- some measure “investable assets” only (presumably meaning your personal home or car is not considered an asset)
- it is difficult to obtain accurate figures on wealth held in the form of say, art works and some other types of assets
By one estimate, about 1 in 8 households has total assets of $1 million or more. This is not surprising due to inflation and the rapid rise in valuations of homes. Indeed, most home buyers today, who pay off their loans during their working years and then retire will have homes valued at high $ values.
A 3-bedroom, 1,336 square foot, now 72-year-old home that we moved out of and sold in the 1980s in the SF Bay area is today valued at $3.2 million! Today’s owners will be surprised that Oxfam expects them to pay an additional $60,000/year in taxes!
Most people start their careers in the bottom one or two quintiles, save during their life for retirement, and end their career around the 4th or 5th quintile. Thus, this tax would fall disproportionately on those who saved for retirement versus having enjoyed life earlier.
Oxfam’s proposal would require they pay $20,000+ per year, every year, for each $1M of assets. A couple of financial analysts have told me that they do not believe a wealth tax would be allowed under the U.S. Constitution.
Most college educated who begin saving early will forego important life experiences and end up over saving for retirement – when the future is uncertain (pandemics, wars?) or a future where Oxfam taxes their saved assets and inflation destroys their savings.
Don’t be an idiot. Enjoy life and do not over save.