There is a reason envy made it in to the Top Ten Commandments.
Envy springs from the fertile ground of entitlement thinking. Resentment builds as feelings of unfair treatment blossom into anger and turn into hatred. Eventually envy feels justified in breaking the other commandments like lying, theft, and even murder. The monstrous crimes of the French Revolution, Russian Revolution, Mao in China, Hitler in Germany, and many other Communist and Socialist regimes are rooted in envy. So is the poverty they generate.
In America we have, for the most part, escaped from bloodshed sort of envy. Instead we focus on “Soaking the Rich” through financial populism, like Andrew Jackson versus the National Bank, William Jennings Bryan versus the Gold Standard, or Teddy Roosevelt versus Trusts. The most famous “Soak the Rich” episode in our history was the income tax, which, as we well know, actually soaked the middle class along with the rich. It was envy which provided the money to fuel our bloated Government and envy continues to be a favorite tool of Big Government.
During the past several years the Socialists and other lovers of Big Government have returned to the envy deception by campaigning against “income inequality”. Now we see another round of “Soak the Rich” populism, with Big Government promoters promising to make the rich pay for everything from free college tuition to a $50 trillion Medicare for All scheme. This time it is not an income tax but a “Wealth Tax” they are pushing.
According to a Wall Street Journal editorial on November 6, 2019, the Wealth Tax has been tried and abandoned by several European countries because of its cost to the overall economy. Sweden lost many of its most productive citizens, including the founder of Ikea, and repealed its tax in 2007. France lost 70,000 millionaires and the Wealth Tax actually caused a net revenue loss. The Germans abolished their wealth tax and a German think tank concluded that a Wealth Tax lowers long term Gross Domestic Product by 5% and employment by 2%. In other words, a Wealth Tax produces little or no net revenue and can cause substantial losses to the economy.
Another interesting fact about the wealth tax in Europe was the levels where the tax kicked in. In Sweden it was only $200,000, in Spain it is $700,000, in Norway it is $170,000, and it was $1.5 million in France. It should surprise no one that the “Soak the Rich” mentality of envy migrated to soak the middle class.
Then there is the effect on stock values of pensions, retirement plans, 401(k) plans, and other investments held by nearly half of Americans. The downward pressure of stock sales to pay for a Wealth Tax could crash the market and ruin the retirement plans of half of the country.
Counting the double tax on corporate earnings, the tax rate for the rich is about 40%. On top of that, their heirs pay another 40% in estate tax. Maybe they should pay more, or maybe they should pay less.
But if our motive is envy, it will boomerang on our economy and on us. We will “soak ourselves” as we “Soak the Rich”.
So remember the Tenth Commandment and pray that we are spared from the high cost of envy.