Envy is the second of the seven deadly sins, after Pride. In Catholic theology, deadly sins are serious failings that result in further spiritual harm if not repented. Envy is especially common and pernicious because once it enters the soul, it is especially difficult to discharge. In Dante’s Purgatorio, the envious are shown huddled together in poverty, their eyes sewn shut with wire so they cannot see the wealth of others. As always, Dante has chosen an appropriate symbolic punishment for the particular sin.
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Where does this leave Zohran Mamdani? He appears to be not only envious himself — standing outside the apartment building of billionaire Ken Griffin’s penthouse apartment, pointing to where Griffin lives and asserting he will impose a pied-à-terre tax on the property, the most expensive in Manhattan — but inciting others to envy. In response, Griffin’s company issued a statement hinting at the possibility of canceling an $8-billion project there.
Actually, inciting envy is the modus operandi of all socialists. It is their means of fomenting division and attracting voters, but it is a particularly ugly way of doing so because it demeans the very people they would lead and creates the potential for violence. One reason envy is so destructive is that it saps the initiative of those who might otherwise be striving to improve their own situation. Instead of worrying about how much money Ken Griffin has (reportedly some $50 billion), why not begin by starting wherever you are qualified and working your way up? This has always been the American way, but socialists undermine this healthy instinct and replace it with the promise of equality of outcomes, which is their means of gaining power. Anyone who has studied the history of socialism knows that it does not produce equality.
Zohran Mamdani and others like to pretend wealth taxes can produce enough revenue to pay for their promises of free transportation, free daycare, subsidized groceries, and even Medicare for all. One estimate of Mamdani’s proposed wealth tax in New York City, which he has no authority to actually impose, comes to $100 million in revenue — out of a city budget of $125 billion. Mamdani has promised to open five government-run grocery stores — none of which has opened so far. Anyone who has experienced state-run groceries in communist countries knows what will come of this: mostly empty shelves, poor-quality goods, and poor service. One poorly stocked grocery per borough is not going to change the lives of New Yorkers. If anything, it will breed disappointment and disillusionment.
Wealth taxes can take many forms — everything from taxing a percentage of one’s net worth to raising marginal rates to hiking property taxes to raising stock and bond transaction fees. In every case, however, wealth taxes create a higher layer of tax on individuals or companies that are already paying most of the country’s taxes. How much more can they be taxed before they flee to others states or countries? And how long will it be before these wealth taxes are applied not just to billionaires, but to millionaires and then to ordinary taxpayers as well? Like all new forms of taxation, wealth taxes are introduced with the premise that they will affect only a handful of individuals, but government always finds a way to broaden them out to apply to others.
The central point is that wealth taxes of the sort proposed by Mamdani do not work. They drive businesses and wealthy individuals away, reduce future investment, cut job growth, and ultimately result in lower revenues to government. Socialist politicians know they do not work, but envy is a crucial element of their appeal. It is essentially political theater, intended to enrage voters and drive them to the polls. The fact that Ken Griffin lives part-time in a $200-million penthouse is no one’s business but his own, but Mamdani has made it an important part of his campaign of “us vs. them.”
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Wherever they’ve been tried, wealth taxes have resulted in lower growth and fewer jobs. This is because most billionaires spend only a tiny fraction of their wealth on themselves — they invest the rest in productive enterprises that create wealth and jobs for others. It is no accident that the high-tax economy of France has an average per capita nominal income of $49,000, whereas that of the U.S. is close to $95,000.
Warren Buffett once said that “money has no value” for him personally. He has lived modestly his entire life, but his company, Berkshire Hathaway, has created tens of thousands of millionaires and contributed immensely to society in general. Socialists have run for office promising “affordability,” but productive companies like Berkshire Hathaway are the ones making things affordable by competing on price with other companies. The Democratic Socialists of America promise the takeover of America’s largest corporations, including Berkshire Hathaway. That in itself would reduce us to the level of a third-world country.
Despite the evidence that wealth taxes cause so much harm — not so much to the rich, who can afford to flee, but to those less well off — a lot will be said about them in this fall’s elections. According to recent polling, socialism is especially popular among younger voters, and the idea of wealth taxes is especially attractive to them — not because wealth taxes actually work, but because they are seen as a way of punishing the successful. These voters are envious of those who have more than they do, and they wish to bring the rich down to their level.
Wealth taxes do not produce additional revenue for cities and states, and they reduce investment and wealth creation. Socialist politicians promise wealth taxes to appeal to voters who are envious of the rich. Those who truly wish to help the poor can do so by creating conditions for more and better paying jobs, and it is the wealthy who are in the best position to do so.
Image: Zohran Mamdani. Credit: Bingjiefu He via Wikimedia Commons, CC BY-SA 4.0.
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