Critics say a wealth tax wouldn't work. Argentina just brought in $2.4 billion with one.
- A one-off tax on Argentinian's wealthiest brought in around $2.4 billion for pandemic recovery.
- The measure was passed in December, as worldwide critics of
wealth taxessaid they weren't feasible.
- Critics say they're difficult to implement, and the ultrawealthy will dodge them, but
Argentinaraised more than expected.
In December, Argentina's Congress voted to pass a levy on those with assets over 200 million pesos, Insider's Joshua Zitser reported. The measure passed by 42 to 26 votes, although it did see some intense political opposition. According to the BBC, the tax was only set to impact the top 0.8% of the population, and about 10,000 people ended up paying the tax, according to some early data. They saw a levy of up to 5.25% on their total assets.Argentina's wealthiest reportedly pushed back on the tax, with some moving to take legal action. Others procrastinated on paying; payments were due April 16, but the Buenos Aires Times reported that only 2% of taxpayers subject to the tax had paid up by early April.
As the subject of wealth taxes has gained steam internationally during the pandemic, critics have emerged, citing issues ranging from feasibility to even legality. Argentina's example suggests their critiques could be wrong, and wealth taxes have viability.
One-off wealth taxes have emerged as a possible pandemic recovery solutionThe International Monetary Fund has said that temporary taxes on the wealthy could help the global
Experts in the UK also called for a one-off measure in December, saying it could bring in around 260 billion pounds. The Wealth Tax Commission was proposing a 1% tax on wealth over £500,000 for five years. One-off taxes do have some precedent in the UK, and potential taxes on wealth may still be looming across the pond.On this side of the Atlantic, Sen.
One of the most prominent wealth-tax critics has been billionaire Leon Cooperman; he's said that he doesn't think a wealth tax is intelligent or legal. He's also said the ultrawealthy would hide their assets. That's an assertion that's been echoed by inequality expert and Nobel Prize-winning economist Angus Deaton: He told Bloomberg that a wealth tax would be difficult to implement, and the wealthy would try to avoid it.
President Joe Biden seems to be opting for taxes that target the wealthy, but don't necessarily constitute a wealth tax. He's proposed, among other measures, raising the income tax rate for Americans making over $400,000, upping the tax rates on capital gains, and increasing the corporate tax rate."It's time for corporate America and the wealthiest 1% of Americans to just begin to pay their fair share," Biden said in his address to the joint session of Congress.
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