What Does Warren Mean by a Wealth Tax?

Elizabeth Warren said in Tuesday night’s debate that she’s shocked, “shocked!” that anyone thinks she’s punitive. Ben Shapiro responded on Wednesday,

Elizabeth Warren (left) from debate October 15, 2019
screenshot taken from clip on the Ben Shapiro Show, episode 878

She’s shocked people think she’s punitive? She is punitive. She’s deeply punitive. And by the way, she’s not just punitive; she’s immoral. There was one point during this debate where Elizabeth Warren actually suggested, during the debate, that the rich are “not like you and me.” Elizabeth Warren is worth $10 million.

What was it she said?

So, understand, taxing income is not going to get you where you need to be, the way taxing wealth does. That the rich are not like you and me. Really really billionaires are making their money off their accumulated wealth, and it just keeps growing. We need a wealth tax in order to make investments in the next generation.

There’s a logic leap here. If wealth keeps accumulating, that means the economy is growing; it doesn’t mean a particular person keeps getting more of a finite economic pie. The more a rich person accumulates, the more gets invested—now and in the next generation.

It’s time for a lesson on economics and on government.

Let’s start with where in the Constitution the federal government is granted power to tax: Article 1, Section 8.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

Before we go on, let’s define terms.

Article I, Section 8 of the US Constitution, on taxes

·         Tax—a compulsory payment, usually a percentage, levied on income, property value, sales price, etc. for the support of a government

·         Duty—a payment due to the government, esp. a tax imposed on imports, exports, or manufactured goods

·         Impost—a tax, esp. a duty on imported goods

·         Excise—a tax or duty on the manufacture, sale, or consumption of various commodities within a country, as liquor, tobacco, etc.; a fee paid for a license to carry on certain occupations

There’s one other part of the Constitution granting power to tax. It’s the 16^th Amendment, ratified in 1913:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

When it was added, people were promised it would only affect the very rich, and even for the rich it would never go beyond 7%. That lasted about three years; it about doubled to 15% in 1916. Not enough, the government decided. Woodrow Wilson more than quadrupled it to 66% by 1917 and then to 77% by 1918%. (I wrote about this starting here.)

If you have made any income above the poverty rate in your lifetime, then you know it isn't just the very rich who are taxed. And obviously the government does not keep its promises. To boot, it does not limit its taxing purposes to paying debts and providing for the common defense and general welfare (i.e., things that benefit all of the states at once, such as coining money, having a postal system, or possibly infrastructure such as an interstate highway system—nothing to do with charitable giving to the poor).

As practically unlimited as the 16^th Amendment made taxing authority to the federal government, it is still limited to income or to specific circumstances—such as imports or the other things listed. Income wasn’t taxable in the original list. Government revenue had to come through tariffs (import fees) or the other listed ways.

We don’t have a state income tax in Texas, which is a boon to the economy. Governments have to get revenue from other sources, property tax being a primary source, also sales and other local taxes. Up until 1913, the federal government was similarly limited.

But the 16^th Amendment does not grant the right to tax wealth.

Let’s define another term, from the Spherical Model website:

·         Wealth is not some mystical entity endowed by either government or birthright. Nor is it something that the haves enjoy by depriving the have nots of their fair share. Wealth, simply, represents the accumulation of the results of labor.

And one more:

·         Capital is always a representation of surplus work that is invested to find ways to produce more wealth.

To summarize, wealth is the accumulation of surplus—working to create more than is needed for subsistence, and storing it (saving it) for later use. Rather than simply storing it, the wealth can be used to invest in ways that produce more wealth.

Most wealth is not stashed in a jar buried in the back yard. It is put to use. It is either spent—used to buy goods and services, which thus brings wealth to the providers of those goods and services, who then use that income to either spend or invest elsewhere. Or it is saved. One of the least productive ways would be in a low-interest savings account. This keeps it liquid—available for use at short notice—but while it sits there, it brings additional income. Where does that come from? Investing. The bank is loaning money to home buyers, businesses, and others who contract to repay with interest.

Another way wealth is invested is in stocks and bonds. These are slightly larger risks than keeping the money in a bank savings account. But they have the potential to bring in greater returns, greater income.

A more direct way would be to invest capital directly in a company with the hope of having the business become a success and bring a greater reward to the investor. Higher risk, but also higher potential returns.

You have probably heard this aphorism: what you subsidize, you get more of, and what you tax, you get less of.

So, if—as Elizabeth Warren suggests—you tax wealth, you get less of it. Obviously. You would directly confiscate money for which income tax has already been paid. So you’re essentially taxing savings. You directly diminish savings. Which means you directly diminish the uses for those savings: capital investment. Economic growth.

What gives the federal government the right to “tax” your savings? So far nothing. The Constitution does not grant that power—not even the 16^th Amendment does that.

That didn’t stop Obamacare from “taxing” us by forcing us to buy medical insurance (at exorbitant rates), which they could get away with only by insisting (at times) that the penalty for not purchasing it was a tax and not a coercion to purchase a service. What was being taxed—and thus discouraged? Breathing. Being alive. That had never been done. It isn’t accommodated for in the Constitution. But that didn’t stop the government—with the support of a wobbly Supreme Court—from asserting it as a power.

So, when we have Elizabeth Warren, Democrat candidate for president, saying she wants to “tax” wealth, let’s be very clear on what she’s saying. She is saying the federal government can come to any person in the country who holds savings and take whatever part of that savings or property that it wishes. She is saying you do not have a right to either your income or your savings or maybe any property. If she decides you have “too much,” she can take whatever portion she wants and can do with it as she—in her infinite wisdom—sees as a better use than however you were going to spend it or invest it or enjoy it.

She says it will not affect any but the very rich. Just as Woodrow Wilson said. (They both were college professors, labeling themselves progressive capitalists—but without the progress or the capitalism.)

The only legal mechanism for the government to confiscate wealth is by constitutional amendment. Except for the very limited eminent domain power, which requires just compensation, the federal government cannot confiscate real property. And there has never been a mechanism for confiscating savings.

But those who ignore the Constitution in all other things are just as likely to ignore this lack of power and reign tyrannically any chance they get.

However, they don’t actually get the money they say they will take.

Just as we know no one in their right mind ever paid the ridiculously high top income tax rates imposed by the progressives in the last century, no one in their right mind would pay the wealth-tax-only-on-the-very-wealthy that Warren “has a plan for.” 

Government gains revenue when it lowers tax rates to more reasonable levels. When they’re too high, people don’t make the income, or they move and make the income elsewhere, putting it out of reach of the government’s clutches. Similarly, if Warren were to attempt to take any chunk of wealth held by those “evil” billionaires, they would move their wealth out of the country. The US would then have less tax revenue, a more sluggish economy overall from lack of investment capital, and essentially no revenue from the “wealth tax.”

But she would have made the covetous poor feel so much better by pretending to stick it to the rich.

That’s what it’s about. Not about gaining revenue for ridiculous unconstitutional projects she has a plan for, not even for paying current debts and obligations. It’s about saying what it takes to get voters to give her power—which she is so very willing to assert the moment she gets it.

As are all of the Democrat candidates.

If we value the freedom, prosperity, and civilization guaranteed us by our brilliant Constitution, we must prevent those who trample it from ever holding the reins of power.

Religious Intolerance at the Townhall

I was blissfully unaware that the Democrat presidential candidates had a townhall on CNN last Thursday, focused on LGBT issues—which, in case you haven’t figured it out, means focused on religious discrimination. But Ben Shapiro did his job by suffering through it for the sake of Friday's podcast at The Daily Wire.

He’s not usually very emotional. Rational is really a good descriptor of his approach to things. But I think this got him as riled up as he gets. Because, when presidential candidates say they’re coming to take away your rights to your beliefs and to share those beliefs with your children—you don’t sit quietly and acquiesce.

Ben Shapiro, from Friday, October 11, 2019
screenshot from here

It started with Beto O’Rourke, who seems to be making a campaign of speaking aloud the things we all know Democrats intend, but that they keep quiet about so as not to wake up the voters. Here’s the question and his answer:

Moderator: Colleges. Churches. Charities. Should they lose their tax-exempt status if they oppose same-sex marriage?

Beto: Yes. There can be no reward, no benefit, no tax break, for anyone, any institution, any organization in America that denies the full human rights and the full civil rights of every single one of us. And so, as president we’re going to make that a priority. And we’re going to stop those who are infringing upon the human rights of our fellow Americans.

Let’s clarify a few things. He’s talking about a lot of organizations. The university I went to, Brigham Young University; Hillsdale College, Liberty University, Baylor, Notre Dame—maybe a majority of private higher education. He’s also talking about taking away your right to attend the church you believe in—unless the church is willing to change its doctrines to suit President Beto. And any religion-affiliated charities—they should be shut down, because they're so evil.

Note that, for the most part, these institutions do nothing to prevent LGBT people from associating with anyone else they choose and doing whatever they want. They aren’t taking away any rights; they’re just not offering any particular services that conflict with their beliefs. If you want a same-sex wedding, go to a church or reception facility down the road that caters to what you want.

But Beto is saying that the very holding of the idea he disagrees with is tantamount to disqualifying behavior. So, all churches, schools, and charities, regardless of their behavior toward LGBT people, must be punished.

But he’s saying just not rewarded by tax-exempt status; that’s not the same. Right? Let’s connect the dots. I’ll let Ben Shapiro do that.

Once you remove their tax-exempt status, and you say they don’t have tax-exempt status anymore, you treat them like a normal LLC. Well, if you have anti-discrimination laws in states like California, or if you’re the Democratic Party and you’re trying to pass the so-called Equality Act, which is really a way of cracking down on religious institutions and forcing people to abide by social rules that they don’t want to abide by (and in violation of the First Amendment—blatant violation of the First Amendment. The Founding Fathers are spinning so fast in their graves, they’re drilling directly to the core of the earth at this point). The fact is that the goal here would be to, then, kick these religious institutions from 501(c)3 tax-exempt status institutions into normal LLC territory and then declare that those LLCs are in violation of non-discrimination policies and shut them down as violative of law.

We’ve already seen them do this with Arlene’s Flowers in Washington State, where, if you are a florist who is religious and only will cater to weddings that are traditional, you’ll be shut down or fined. The same with photographers. We’ve seen it with Jack Phillips, the baker in Colorado. We’ve seen all of that. Again, we’ve seen the Democrats and the left do this.

They’re going to do that to your church. They’re going to remove tax-exempt status, and then they’re going to shut it down.

Beto O’Rourke wasn’t the only one letting long-held beliefs escape into the spoken word. Corey Booker helped with that. Here’s what he said:

Corey Booker at Thursday's CNN Town Hall
screenshot from here

Corey Booker: And so, for me, I cannot allow, as a leader, that people are going to use religion as a justification for discrimination. I could respect your religious freedoms but also protect people from discrimination. And, as I said in an earlier answer, I grew up in a household where my parents talked to me about how people used to use religion to justify the discrimination against African Americans

How sad for him that he grew up in a household that taught him lies. Religion is the reason slavery ended. Historically, did some slaveholders try to justify their behavior with religion—probably. But not successfully. Because God is no respecter of persons. And, we should add, ALL of those who held those beliefs were Democrats. Republicans—and a majority of religious people among them—gave their lives and treasure to put a stop to it.

It’s practically an aphorism today among those who seek power through tyranny, poverty, and savagery that “religion” is the evil thingin itself. Just like pagan kings in ancient times who set up their own religions—often making themselves the personification of god—as a means to control the beliefs, and thus the behavior, of their people.

Here’s Ben Shapiro’s not exactly calm response:

“I cannot allow”? Who the “F” are you, dude? You cannot allow? Guess what? That’s not your right.

My right is to act in ways that don’t harm anybody else. And if I choose to have an institution where I am going to elevate heterosexuality above homosexuality, that is not harming anyone else. You don’t have to participate in that institution. It’s a free country.

I mean, you have institutions where you don’t tolerate my religious beliefs. I don’t expect that when I walk into a mosque that suddenly they’re going to start practicing Judaism. I don’t expect that when I walk into an atheist meeting, they’re going to start keeping kosher. And I don’t expect that when I walk into the offices of the Human Rights Campaign, that they’re going to start handing out literature from Leviticus.

Why in the world would you not express the same degree of tolerance for people who disagree with you as people you agree with? If you are only tolerant of people who agree with you, this is a good indicator you are not a very tolerant person.

Religious freedoms—and, along with that, parental rights to the upbringing of their children—are at risk whenever there’s a chance of a tyrant gaining power.

Walt Heyer on the Candace Owens Show
October 13, 2019
screenshot from here

On a related issue, this Sunday Candace Owens talked with Walt Heyer. He’s been through a lot. In his 40s, he transitioned, including surgery and hormones, to live as a woman. The problem was, he always knew those outward changes didn’t actually change who he was. There were things he needed to address, from childhood, that had made him reject who he actually was and try to be something else. Eventual therapy led him to deal with those things. And he transitioned back, as much as that is possible, after seven years.

The original change cost him his family and his job. So to admit that was a huge mistake was very hard. If only he’d had the therapy he needed in the first place! It was after just the second visit that his doctor diagnosed him with gender dysphoria and told him the treatment was to transition through hormones and surgery. He barely knew him. He explored nothing about co-morbidity—other problems typically linked with transgender (and other LGB) issues.

Since transitioning back, he has been outspoken, and has created a ministry to help those who have transitioned and find no solution to their problems there.

His issues started very young, when a grandmother used to dress him up, and keep it their secret; and she would tell him how cute he was, and give him affirmation for pretending he was a girl. When his parents found out, they discontinued contact with that grandmother. But an uncle sexually abused him, and his parents didn’t believe him. So he came to believe both that there were things he couldn’t tell adults, and that there was something wrong with who he was.

That experience is not uncommon among people with gender dysphoria. An idea gets planted very early. If talked through, or even left alone, often the mistaken idea gets resolved and the person goes on to lead a normal life. But the transgender activists today seek to intervene, even against parents’ wishes, and castrate and mutilate the prepubescent child, making them forever unable to live a normal life.

Here’s what Heyer says about our children and schools:

When you begin to introduce these ideas that you can change your gender, change your sex, you begin the early sexualization of children, which is abhorrent. It shouldn’t be done, and it shouldn’t be allowed.

We’re interfering with their natural development. These are children that are exploring every opportunity and trusting adults to guide them and to nurture them properly. But introducing all of this sexuality, and all of these things at such an early age, is very disturbing.

Today I work with hundreds of people who’ve been through this. And what I’m seeing is, up to 50% of them have been sexually abused. And so, sexual abuse is kind of a common issue that happens with this ideology.

A healthy psychological society is built on families. And kids are the core of the next generation. And if we’re ripping our kids apart in school with this ideology, we’re ruining even the next generation. And this is why it’s so critical to address this issue.

We should not be teaching children in school that they can change genders. It’s not a vending machine for genders. This is a critical issue that needs to be removed from the school. LGBT material doesn’t need to be in our public schools. Reading, writing, arithmetic is what we need in our schools, not LGBT agenda stuff.

You can’t give in on one uncompromisable issue and expect that the others won’t follow.

We are in a culture war. While we’re set up to allow a great deal of difference of opinion in our society, the intolerant side has to be prevented from gaining power over us—because they do not allow dissent.

Those of us who honor God, life, and family (and we could add the other two: truth and property ownership) are heretics in the religious worldview of Corey Booker and Beto O’Rourke—and all the other Democrat presidential candidates, none of whom would dare to disagree. That means we have an obligation to ourselves, our children, and civilization as we know it to keep these intolerant religious bigots out of power.

Gotta Love Texas

I’ve probably mentioned this before, but Texas is not your everyday run-of-the-mill state. It used to be its own country. And there’s a certain pride here—that is not without substance. When we go to foreign countries, and people ask where we’re from, we are more likely to say Texas than the USA. Texas is kind of All-American. Anything good about being American is embedded in saying we’re from Texas. Texas love is something I didn’t really know about until we moved here.

Sometimes we get together just to give a happy “Yee Haw!” that we’re here. So that’s what we did for fun this week.

Governor Greg Abbott was in Houston on Tuesday, and we (son Political Sphere and I, along with grandson Little PS2) got to go hear him speak.  It was a feel-good kind of experience—very American, very Texan. So I thought I’d share a few lines. (Note: any quotes are from my notes and may not be exact quotes.)

Governor Greg Abbot is greeted by the
restaurant owner hosting the event

Governor Abbott is Texas proud:

I don’t believe it’s the United States of America that is broken, but it’s Washington, DC, that is broken, and it takes states like Texas to fix it.

That kind of theme came up several times. He also said, “Texas is what America is supposed to be. American needs Texas now more than ever.”

There was a bit of Texas swagger, about what Abbott himself has done, and what Texas is doing that probably every other state ought to do.

We even love the shape of our state.
This photo is a University of Texas class photo

He reminded us that, as Attorney General, he sued Barack Obama 31 times, several times challenging Obamacare, a law which only stands “because Justice Roberts rewrote it.” He suggests (that’s putting it too mildly; he insists) we repeal the whole thing, “and replace it with laws that protect patients and doctors.” I don’t know the specifics of such a law, but, since this is Texas, you can expect that to coincide with free market principles, rather than regulatory interference.

He said we “need judges who will apply the law, not re-write it.” In reference to the Supreme Court ruling to redefine marriage, he said Texas has done three things. First, Texas already has a Religious Freedom Protection Act—similar to the US RFRA law, enacted 15 years ago.

Second, the legislature passed the Pastor Protection Act. This was signed in June, ahead of the SCOTUS ruling, saying that no pastor, priest, rabbi, clergy, or religious leader can be forced to either perform or recognize a “marriage” that goes against their sincere religious belief.

Third, on the day of the Supreme Court decision redefining marriage, Governor Abbott issued an executive order that all offices in the state would protect religious liberties of workers who hold a different belief about marriage, and also all businesses, so no one will be forced to violate their religious beliefs.

Speaking of the Courts, the 5^th Circuit Court erroneously struck down our Voter ID law, even though the US Supreme Court has already upheld virtually identical voter ID laws in other states.  He told us, in case you thought that voter fraud wasn’t an issue, “on the very day a lawyer in Texas was arguing against Voter ID, voter fraud scam indictments came down in south Texas—for using cocaine to buy votes.”

Governor Abbott reminded us that the federal government has an obligation to secure our sovereignty and secure our borders. But they won’t. So, Texas is spending $1 Billion to do it ourselves. We’re increasing personnel, barriers, and air support to secure the border.

Governor Abbott said, “Texas is the model for governing in the United States of America.” He gave several examples. One was that, in response to attacks on our military, including here at Ft. Hood, he has ordered that all on-duty soldiers be armed. Another is taking care of veterans, with particular concern for PTSD. And Texas has now declared February 2^nd as Chris Kyle Day, honoring him in his work to rehabilitate PTSD sufferers.

Texas is exemplary on taxes. The legislature cut the business franchise tax by 25%. Combine that with the property tax cut—raising the homestead exemption, which is Prop 1 on the November ballot—that will be $4 Billion is tax cuts.

We use our money well. We’re leading the nation in improving roads. We kept $10 Billion in our rainy day fund, to address anything that arises.

He proclaimed the Texas rule, loudly: “Don’t Spend All the Money!” and added, “That’s something Washington, DC, needs to learn.”

He made some comparisons between Washington, DC, and Texas:

Washington defines success as more people dependent on government. Texas defines success as more entrepreneurs, more people who get jobs. Texas works to achieve exceptionalism.

Texas is responsible for most of the economic growth in the nation during this president’s administration. With better government in Washington—say, something akin to abiding by the Constitution, and getting out of the way of the free market—Texas would be even better off, and so would the rest of the country.

If you’re into contrast, the Democrat presidential primary debate was held that same evening, just a few hours later. I chose not to assign myself to watch. But I scanned the transcript and heard a few painful lies on radio in the car. I read a pretty good response or two. One, entitled “Two Hours I’ll Never Get Back,” by Derek Hunter, offered this summary:

I don’t know what country those candidates were talking about, but it sounds awful. It has a rigged system that keeps down minorities, women, gays, men, aliens, animals, trees, anything living and most things dead. But somehow this horrible nation favors the rich. I’m not sure how they earn the money the rich steal from them since they’re so severely oppressed, but it all just sounds horrible.

Whoever has been running the place they were speaking about must be some kind of monster for not fixing these egregious injustices.

Fear not, America. Those Democrats running to replace that person promise more of the same, only with different results. There’s a definition of insanity in there somewhere.

The basic theme of the Democratic debate was: “Big government isn’t working, so we need bigger government.”

The debaters agree the biggest security problems we face are not Islamist Terrorism calling for Death to American and acting on that jihad. No, it’s weather. And which of the candidates is most adamant about preventing law-abiding citizens from owning firearms for self-defense. And what we must spend our money on is free college for everyone—even those who drop out of high school (at rates above 50% in “progressive” run cities), and even those who hate school and would be better off finding an alternative career path.

By contrast, again, Governor Abbott mentioned a young man he had recently met who had completed a two-year certification to become a welder. In his first year he earned $130,000. In his second year he earned $140,000. Abbott quipped, “If this governor thing doesn’t work out, at least I know I can get a welding certification and make a living.”

No just a living wage, but up there in the top 10%. And the money goes further here in Texas. To be fully truthful, it’s quite possible that the welder makes a lot less in years like this one, when oil prices are down. But even if that welder is only making $60-$80,000 a year, that’s better than most law graduates are making—after four years of college, three years of law school, and a couple years’ gross salary in student debt.

But that’s not an option Obama and his would-be replacements want young people to know about. He wants them to be beholden to government, go into a fruitless field—maybe ethnic studies—and the stay dependent. That might be the way Democrats fish for voters, but it’s not good for American citizens.

In case you thought integrity, honesty, and reliability might come up—well, that’s not their strong suit.

The little part I heard on radio included this exchange, in response to a call to ignore the email scandal:

COOPER: I know that plays well in this room. But I got to be honest, Governor Chafee, for the record, on the campaign trail, you've said a different thing. You said this is a huge issue. Standing here in front of Secretary Clinton, are you willing to say that to her face?

CHAFEE: Absolutely. We have to repair American credibility after we told the world that Saddam Hussein had weapons of mass destruction, which he didn't. So there's an issue of American credibility out there. So any time someone is running to be our leader, and a world leader, which the American president is, credibility is an issue out there with the world. And we have repair work to be done. I think we need someone that has the best in ethical standards as our next president. That's how I feel.

COOPER: Secretary Clinton, do you want to respond?

CLINTON: No.

Just plain “No.” Credibility is not worth talking about. I haven’t heard any commentators mention this, but it’s telling. If you’re talking about credibility, you don’t get that from the Democrats, maybe particularly Hillary Clinton, although it’s hard to be less credible than our president oval office occupant.

I don’t like having an anti-Constitution president. I hope we can soon change that. The old, overwarmed options on the Democrat side lead only to greater tyranny and poverty.

The Republican bench is deep. And the contrast is clear.

Just as those who have lived under socialism appreciate the freedom of America, people in America who can experience the difference between places like Texas and places like Chicago or DC appreciate the freedom where it is real.