Andrew Yang disagreed with almost every other candidate during the Democratic presidential debate Tuesday, saying he didn’t support a wealth tax because countries in Europe have already tried it and it didn’t work.
“A wealth tax makes a lot of sense in principle,” Yang said when asked whether he supported a wealth tax like those proposed by Elizabeth Warren and Bernie Sanders. “The problem is that it’s been tried in Germany, France, Denmark, Sweden, and all those countries ended up repealing it, because it had massive implementation problems and did not generate the revenue that they’d projected.”
“If we can’t learn from the failed experiences of other countries, what can we learn from?” he asked. “We should not be looking to other countries’ mistakes. Instead, we should look at what Germany, France, Denmark, and Sweden still have, which is a value-added tax.”
So far, at least 15 European countries have tried wealth taxes. All but four, though, have repealed them so far.
Instead, the value-added tax Yang supports is a form of sales tax on products and services. He wants to use the revenue from the tax to give every American adult a universal basic income of $1,000 a month, which he calls a “freedom dividend.”
Fellow Democratic presidential candidates Sanders and Warren want to tackle wealth inequality by raising trillions of dollars in revenue from taxing the wealth — in addition to the income — of millionaires and billionaires and use that money to fund their various government social programs.
Sanders’ wealth tax plan would raise an estimated $4.35 trillion over 10 years, to pay for programs such as “Medicare for all” and universal child care. It would apply to households with a net worth above $32 million, which is about 180,000 households — the top 0.1% — starting at a 1% tax rate and rising to 8% for married couples with more than $10 billion in wealth.
In contrast, Warren’s plan would raise approximately $2.75 trillion over a decade by levying a 2% wealth tax on assets worth more than $50 million and a 3% tax on fortunes worth more than $1 billion. The tax would hit approximately 75,000 families.
N. Gregory Mankiw, a professor of economics at Harvard University, said that both Warren and Yang had “proposed bold plans for redistributing economic resources” but “only Mr. Yang’s is practical” and “is more likely to succeed.”
Many economists say that it would be difficult for the government to accurately assess the value of the assets of the rich, given the ability of wealthy families to hire tax lawyers to engage in complicated planning to avoid levies.
