Sobering Up About a Wealth Tax

The estimable R.R. Reno’s wit is as dry as his martinis, so it is hard for me to know how seriously he meant the proposal in his “On the Square” essay ” Martinis and Taxes ” today, for a federal wealth tax.  His friend, however, led him astray by invoking the takings clause of the Fifth Amendment as an obstacle to such a tax.  Not so; there is no such thing as a tax, otherwise valid, that runs afoul of the clause that says that a taking of private property for public use must be compensated—else we would find that the government is disabled entirely from undertaking any kind of taxation (hmm, wait a minute . . . )

No, the very real problem with a wealth tax is that it would have to be “apportioned” geographically by state, according to the latest census.  That’s because it is a “direct” tax on a person’s property, not on the transactions in which he engages, as is the case of the income tax.  And this apportionment requirement creates a real nightmare, as I explained at NRO ‘s Bench Memos last month when the idea of a wealth tax appeared in a New York Times op-ed .  The apportionment requirement may be idiotic, and its historical origins obscure, but it’s very real, and there is no way a wealth tax could be made to work without backfiring.