Via Economic Policy Journal

Jonathan Soros

The son of George Soros, Jonathan, is out with an op-ed in Barron’s Weekly.

In it, the kid calls on Biden to tax wealth:

While markets are at all-time highs, President-elect Joe Biden will inherit an economy projected to produce $900 billion less in federal tax revenues over the next two years due to Covid-19. As he seeks to “build back better,” he should look to incorporate a wealth tax in his proposals.

He makes this absurd claim:

For those with aggregated wealth, there is no tax incentive to put assets to productive use, nor any consequence to leaving them fallow. 

Does he even understand that his father’s Family Office is about investing his father’s wealth and this is what most wealthy people do? And that this includes complex active tax avoidance?

The kid apparently has a problem with his father’s consumer spending and apparently hates that the rich in general may spend some of their money on high-end luxury goods:

Taxing wealth means that mattress-stuffing would no longer be a tax-free option. To stay rich, you have to make investments that at least cover the burden of the tax. And indulgence assets like planes, yachts, and large estates remain part of one’s net worth and a continuing tax liability after purchase. For the first time, the tax code would create a specific incentive for wealth to be used productively in investments that produce income.

It appears the kid should be calling for a luxury tax instead of a wealth tax, if he is really concerned about wealth that is not invested. In other words, there is a problem with his argument at a very basic level.

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But does the kid realize a primary incentive for seeking wealth (that is producing items of value for the markets) is to spend some on luxury goods?

When the kid starts getting haircuts at Super Cuts and posts portraits taken from a personal cell phone in a suit that costs less than thousands of dollars, maybe then we can start paying attention to his concerns about luxury spending.

But right now, it appears that from start to finish, the kid needs to do some further studying and thinking.

RW