2018 Donald Trump would likely be appalled at the redistributionist political philosophy of 1999 Donald Trump.
In the run-up to his first presidential campaign in 1999, Trump — who ran a short-lived campaign on the Reform Party ticket in advance of the 2000 election — proposed a radical idea: Taxing the wealth of millionaires and billionaires.
Under his proposal, anyone with assets of more than $10 million would pay a one-time wealth tax of 14.25 percent as a means of generating the revenue necessary to wipe out the national debt in one fell swoop.
“By my calculations, 1 percent of Americans, who control 90 percent of the wealth in this country, would be affected by my plan,” Trump said at the time in a statement to CNN, adding that eliminating the national debt would, according to his math, free up $200 billion a year that would normally be paid in debt service. “The other 99 percent of the people would get deep reductions in their federal income taxes.”
$100 billion of the money saved each year, according to Trump’s plan, would go to the Social Security trust fund, helping to ensure the retirement security of future generations (although it would also repeal the estate tax, which only affects the richest two out of every 1,000 estates).
“Personally this plan would cost me hundreds of millions of dollars, but in all honesty, it’s worth it,” Trump said.
The Donald Trump of 1999 would likely find a lot in common with present-day Barack Obama. In a speech in South Africa earlier this week, Obama called for higher taxes on the wealthy as a means of providing workers a decent standard of living as artificial intelligence and advanced technology continues to replace more jobs.
“There’s only so much you can eat. There’s only so big a house you can have. There’s only so many nice trips you can take. I mean, it’s enough,” Obama said. “You don’t have to take a vow of poverty just to say, ‘let me help out a little.’ ”
Trump’s call in 1999 for a wealth tax was also floated by French economist Thomas Piketty, who wrote the bestselling book on wealth inequality, Capital in the Twenty-First Century. In an interview with CNBC, Piketty said a wealth tax is the easiest way for wealthy people “to contribute to the common good.”
“A progressive tax on net wealth is better than a progressive tax on consumption because first, net wealth is better defined for very wealthy individuals and consumption … is difficult to define,” Piketty said.
A different wealth tax proposal floated by New York University economist Daniel Altman in 2013 would tax a small portion of wealth each year, with a larger percentage for each wealth bracket. Individuals with less than $500,000 in assets would be free of the tax, while those with net worths of $500,000 to $1 million would pay a one percent tax, and all others who have more than $1 million to their name would pay two percent.
This proposal could generate approximately $470 billion in new revenue each year from the 9.4 million Americans whose net worths are between $1 million and $5 million, assuming a flat wealth tax of two percent. A two percent tax on the $2.39 trillion in wealth held by the 540 billionaires living in the U.S. would bring in an additional $47.8 billion in annual revenue.
However, the Donald Trump of today is decidedly more Scrooge-like in his view on wealthy Americans keeping their assets to themselves. The tax cuts he signed into law last year are overwhelmingly beneficial to corporations and the rich by doubling the estate tax threshold, and the top one percent of income earners (people who make $730,000 or more) reap 20 percent of all tax cuts, getting an average tax cut of $37,000.
President Trump isn’t finished cutting taxes for the rich, either. In May, he hinted at new tax cut legislation that would be proposed before the midterm elections this November. As of this writing, he has still not released his tax returns to the public.
Tom Cahill is a contributor for Grit Post who covers political and economic news. He lives in Bend, Oregon. Send him an email at tom DOT v DOT cahill AT gmail DOT com.