Note: This “Moore to the Point” commentary aired on NewsTalkSTL on Saturday, April 2nd. Audio included below.

“If you want less of something, tax it.” That’s (part of) a famous quote attributed to Ronald Reagan – and you don’t have to be an Econ major to see how that makes sense. It’s a basic cost-benefit/risk-reward analysis. The higher the tax on something, the higher the cost, the more we start to consider whether it’s worth it or not.

Recently, President Biden proposed a new “billionaire tax” as part of the 2023 federal budget. This tax would apply to “total income,” meaning not just traditional income but also unrealized gains. Thus, if the value of an asset increases, you would be taxed on that increased value, even if you didn’t sell the asset. In other words, it’s a wealth tax.

Is that wise? Do we want less wealth? Or do we just want other people to have less wealth? “Tax the rich” is a popular concept – particularly since most of us don’t qualify as “rich.” But the true test of any tax shouldn’t be whether we approve of who it affects, but rather what it affects – and how.