Taxing Wealth Makes Sense, But It Won’t Fix Our Economy

In June, Elon Musk became the world's first trillionaire when SpaceX began trading on the Nasdaq. Now, the U.S. midterms are here, and wealth taxation is on the ballot. Californians are set to vote on Proposition 40, which would take 5% of fortunes above $1 billion, once, and send nine-tenths of the revenue to fund California’s Medicaid program. A swarm of Silicon Valley billionaires, including Google co-founder Sergey Brin, has spent more than $333 million campaigning against the potential tax, warning it will backfire and push the wealthy to flee the sunshine state. Such reactions are not new. Even the income tax once looked like an assault on property. The Supreme Court struck one down as unconstitutional in 1895, and it took the 16th Amendment in 1913 to make it ordinary. Taxes on great fortunes may travel the same road and become unremarkable within a decade. Plus, research indicates that the wealthiest households often pay lower effective tax rates than the people who work for them. I support Proposition 40. But it is not sufficient in addressing the underlying economic issues at hand. A wealth tax like Proposition 40 tries to recover a share of value long after that value ha...