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32 U. Miami L. Rev. 23 (1977-1978)
Do We Want a Wealth Tax in America

handle is hein.journals/umialr32 and id is 39 raw text is: Do WE WANT A WEALTH TAX IN AMERICA? BARRY L. ISAACS* The author examines the arguments for and against a tax on individual's wealth, and coneludeq that the economic and admin- istrative detriments of such a tax would outweigh the benefits. I. IN TRODU CTION ............. . .. . ........ ........ .. 11. THE CLARK PROPOSAL ................................. III. CONSTITUTIONALITY OF A WEALTH TAX ................. IV. WEALTH AND THE WEALTHY: SOME STATISTICS .................... V. GENERAL PRINCIPLES: THE CONTROVERSY ........................ A. Argum ents for a W ealth Tax ................................ B. Arguments Against a Wealth Tax .......................... VI. ADMINISTRATIVE PROBLEMS ATTENDANT TO A WEALTH TAX ......... A . In trodu ction ............................................... B. Threshold Level and Assessment Costs ..................... C . D iscovery of A ssets ......................................... D . V aluation of A ssets ........................... ............. VII. ECONOMIC ASPECTS OF A WEALTH TAX ........................... V III. C ON CLU SION ............................ ....................... 23 24 25 31 33 33 35 38 38 39 42 44 46 49 I. INTRODUCTION The idea of instituting a wealth' tax in America, whereby an annual tax is imposed on the entire value of an individual's assets less his liabilities, has hitherto received little serious discussion in this country.' This neglect may be changing, however, particularly in the light of its adoption in such diverse countries as Switzerland, India, Sweden, Columbia, Ceylon, Pakistan, Japan,3 Germany, Denmark, and Luxembourg.4 In addition, the present governments of England and France have also expressed considerable interest in the idea, with the expectation that such a tax will be introduced quite soon.' * Member of the Illinois and Missouri Bars. 1. Everyone has a notion, sufficiently correct for common purposes, of what is meant by wealth. J.S. MILL, PRINCIPLES OF POLITICAL ECONOMY 1 (7th ed. 1871). We really, and justly, look upon a person as possessing the advantage of wealth, not in proportion to the useful and agreeable things of which he is in the actual enjoyment, but to his command over the general fund of things useful and agreeable; the power he possesses of providing for any exigency, or obtaining any object of desire. Id. at 4. 2. W. VICKREY, AGENDA FOR PROGRESSIVE TAXATION 366 (1947). See also R. GOODE, THE INDIVIDUAL INCOME TAX 11-57 (rev. ed. 1976). 3. Japan adopted a net wealth tax in 1950 but repealed it in 1953. Tanabe, The Taxation of Net Wealth, 14 INTERNATIONAL MONETARY FUND STAFF PAPERS 124. 4. Id. 5. See Wealth Tax, Cmnd. No. 5704 (1974); Select Committee on a Wealth Tax, Session 1974-75, H.C. JOUR. 696, I to IV (Nov. 1975); Prest, The Select Committee on a Wealth Tax,

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