The Economic Perspective: “Should a Wealth Tax be an Addition or Substitute?”

This is Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program asks, should a wealth tax be an addition or substitute?  Mike, some presidential candidates are advocating a new national wealth tax both as a way to raise revenue and address economic inequality.  I have two questions.  First, what is a wealth tax?   Second, how would it interact with other taxes?

  • Proposals for a wealth tax have been made for the national level
  • Wealth tax is a tax on wealth, or net worth, meaning difference between value of investments and value of debts
  • So base is much larger than for income tax – which taxes annual income
  • Proposals made have been for new wealth tax on the very wealthy
  • But some economists worry about economy if do in addition to income tax
  • So, some argue an alternative is to substitute a wealth tax for the income tax
  • Would actually go back to the roots of the nation’s tax policy
  • I’m MW

And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics