Have Americans Become Socialists?

It is unknown whether Donald Trump will succeed in building his Mexican border wall, denuclearize the Korean peninsula or reduce America’s trade deficit. Yet, after two years in office he can be credited with having launched a debate that would have seemed impossible in the United States: Should there be a wealth tax?

For some weeks, a “French touch” has taken hold of Democratic leaders, who are vying against each other’s tax-the-rich schemes. It all derives from “AOC,” the acronym for the American left’s driving force, Alexandria Ocasio-Cortez. Recently elected to the House of Representatives, the former New York waitress proposes to tax the 16,000 richest Americans, who earn more than $10 million per year, at a 70 percent rate.

Massachusetts U.S. Senator and Democratic primary candidate Elizabeth Warren wants to raise taxes on earnings above 50 million dollars by 2 percent, and earnings over a billion dollars by 3 percent. This would affect a total of 75,000 households. As for Bernie Sanders, who also wants to run for the White House, he envisions a 45 percent tax rate on inheritances above $3.5 million, and of 77 percent on those over a billion.

An Unfair Fiscal Reform

On the other side of the Atlantic there are no “yellow vests,” but rather a crisis of conscience that owes much to Mr. Trump. America’s inequalities did not originate with the New York billionaire, but his tendency to worsen the problem instead of trying to alleviate it has rearmed the American left’s ideological arsenal.

Trump was elected on a plan to help those left behind by globalization, but his record can be summed up as an unfair fiscal reform adopted a year ago that basically benefits big business and the richest people. The marginal tax rate was reduced by two points, and inheritance tax for fortunes below $11 million was abolished.

And Mr. Trump was very careful not to abolish the “carried interest” tax niche, which permits investment fund managers to proportionally pay less than their secretaries. This year, the top 1 percent is going to save $60 billion in taxes without even asking for it. What was the urgent need for this in a country where the richest 0.1 percent own as much as the poorest 90 percent?