By: The Economist
February 2, 2019
DURING HIS lesser-known run for president, which began in 1999, Donald Trump proposed levying a wealth tax on Americans with more than $10m. He may soon find himself campaigning on the other side of the issue. That is because Democrats are lining up to find ways to tax the rich. Senator Elizabeth Warren, who wants Mr Trump’s job, has called for an annual levy of 2% on wealth above $50m and of 3% on wealth above $1bn. Alexandria Ocasio-Cortez, a prominent new left-wing congresswoman, has floated a top tax rate of 70% on the highest incomes.
In one way these proposals are a relief. Left-wing Democrats have plenty of ideas for new spending—Medicare for all, free college tuition, the “Green New Deal”—that would need funding. Mainly because America is ageing, but also boosted by Mr Trump’s unfunded tax cuts, the debt-to-GDP ratio is already expected to nearly double over the next 30 years. If a future Democratic administration creates new spending programmes while maintaining existing ones, higher taxes will be necessary.