The wealth tax illusion: We cannot confiscate our way to prosperity

The wealth tax proposed by Sen. Elizabeth Warren (D-Mass.) arrives wrapped in a promise that feels almost effortless: Tax the rich just a little bit more, and suddenly the country can afford everything it has been told it cannot — universal childcare, free community college, paid family leave and housing on a scale that reshapes entire cities.

It’s the kind of promise that gains momentum quickly because it asks voters to believe two things at once: that the resources already exist, and that accessing them is simply a matter of political will.

Warren’s proposal calls for a 2 percent annual tax on wealth above $50 million and an additional 1 percent above $1 billion. It sounds modest, even technical, until you look more closely at what is being taxed, and what happens when that capital is pulled out of the economy that created it.

Remember, this is not a tax on income. It is a tax on accumulated capital already deployed in businesses, innovation, and job creation. And so the question is not simply how much can be taxed, but also what happens when you begin extracting capital that is actively producing growth.

The math alone raises serious doubts. Even if the federal government confiscated 100 percent of all U.S. billionaires’ wealth — roughly $6.8 trillion — it would cover only about 18 percent of the national debt. And of course, that would be an unrepeatable one-time liquidation — not something that could sustain permanent commitments requiring funding year after year.

We do not have to speculate about how wealth taxes unfold. For decades, France maintained a wealth tax much like Warren’s. The result was not a more equitable society but capital flight. Tens of thousands of wealthy French citizens relocated assets and residency abroad. Economist Eric Pichet estimated that the tax ultimately cost France nearly twice what it collected in lost investment and economic activity.

President Emmanuel Macron, no conservative, abolished the tax in 2017 after concluding it was damaging France’s economy without meaningfully........

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