On taxing wealth, Huey Long had it half right

    If Huey Long were on the political scene today, chances are I would be dead set against him. He was a despot and a demagogue. And yet, if you look back at some of his proposals, they aren’t so radical at all. In fact, water them down a little and they make darn good sense!
    Some of Long’s proposals are already law. The credit for Social Security and other New Deal programs belongs to Huey Long, not Franklin Roosevelt. Roosevelt only enacted them in order to take the wind out of Long’s sails, as Long was a serious contender for the 1936 presidential election and was agitating mightily for them.
    Long’s signature campaign platform was his Share Our Wealth plan. Essentially this plan was designed to whittle down the large estates and help the poor. Long hadn’t done his math, because it really wasn’t going to help the poor that much, but he told one reporter that was a worry for another election.
    Long’s plan, which I don’t agree with entirely, would have effectively sought to cap both income and wealth. He started out wanting to tax estates of $50 million or more (1933 dollars!) but quickly amended this to estates of $5 million or more. His plan was to cap annual income at $1 million and to progressively tax large estates, so that a $5 million estate would pay a five percent annual estate tax and an estate of $8 million or more would pay an annual estate tax of eight percent. Although I don't agree with the scope of Long's plan, I am surprised that there is essentially no voice in America calling for any taxation on wealth. What voices there are call for a one-time, ruinous tax at the time of death, which is counterproductive.
    It’s worth noting that Long’s plan really wouldn’t confiscate these people’s wealth, only whittle it down – a death of a thousand cuts, if you will.
    So what would Long’s plan look like today? A million dollars in 1933 is almost equal to $18 million today. $5 million is almost equal to $80 million. I’m not in favor of capping income at all, but levying a few wealth taxes on estates of more than $80 million – or more than $10 million for that matter – isn’t going to harm anyone.
    Now let me add that I think high income taxes are always a bad idea. People really will quit working and quit investing. There are a lot of good reasons why we shouldn’t tax income at high rates, no matter how high that income is.
    But a small annual tax on wealth is another matter. I think Huey Long’s proposed eight percent tax on large estates is too large, but a two percent annual tax on large estates and a three percent tax on mega-estates isn’t going to “confiscate” anyone’s wealth. Make it four percent and you can do away with the death tax altogether.
    This wealth tax can also be applied to corporations that send their profits overseas. The corporation either has a net worth or not. If it does, tax it. I’m always amused when people like Warren Buffet call for an increase in the income tax. You could raise the income tax to 90 percent and it wouldn’t hurt Buffet, because he has very little income in relation to his wealth. He never sells anything, and thus never has to pay taxes on his profits.  But tax his wealth, and suddenly this man will have to pay his fair share, and see if he doesn’t sing a different tune on taxes!
    Make no mistake, rich people contribute a lot to this country. I am a capitalist through and through. But over the last dozen years or so the moneyed interests have manipulated the system to profit when times are good and to have the taxpayers cover their losses when times are bad. Essentially over the past 10 years there has been a mass confiscation of wealth and income from the American middle class to transfer it to the high end of the upper class. Should we as a society snatch a little back it isn’t “confiscation.” It’s a self-help repossession.
    Our system is no longer a capitalist system, but a crony capitalist system, where spoils are distributed based on political contributions or racial affiliation.  Most schemes to raise taxes do so by hitting the upper middle class while allowing the super-rich to avoid taxes. It’s wrong.
    If we follow Huey Long’s advice and tax wealth, we tax everyone, and tax everyone fairly. We just don’t need to go overboard while we’re doing it.