How wealth taxes backfire

[00:00:00]Recently, Elizabeth Warren, Bernie Sanders, and other Democrats from the anti-math wing of the party have proposed wealth taxes. Even Europe has figured out that wealth taxes just don't work very well. In 1990, 12 of the 36 OECD countries had a wealth tax along with their chocolate [music] and hilarious automobiles. By 2017, the number of countries with a wealth tax dropped to five, although they still have their ridiculous toaster cars.

[00:00:22][music] It's not that all these countries, which previously liked wealth taxes, suddenly decided they liked wealthy people. Don't worry. They still hate rich people. And Americans, and air conditioning, and ice cubes, and ice cube. [music] Because you know.

[00:00:42]He's rich. It's just that practically they found wealth taxes don't actually raise very much revenue. Administration [music] is expensive, assessment is difficult, and effects are distortionary. The most famous example of a country abandoning a wealth tax is [music] France. They repealed their wealth tax in 2017 after finding that it cost the government twice as much revenue >> [music] >> due to capital flight to other more polite deodorant-friendly countries. The idea that we can have bountiful tax revenue if we poke billionaires just doesn't pan out. If we took all the money from every billionaire in the country, liquidated every stock, drained every swimming pool in martini, seized mansions, bank [music] accounts, and yachts, melted down their golden toilets, ate their geese, and executed their buttlers, we wouldn't have enough money to fund the government for a single year.

[00:01:24]>> [music] >> And we can only do it once.