On April 24, 1964, President Lyndon Johnson strode up to a ramshackle house in Inez, Kentucky, and announced to the invited reporters that, “I have called for a national war on poverty. Our objective: total victory.” That war consumed well over $20 trillion, yet poverty rates (as measured by the government) barely budged. Even that shack in Inez, Kentucky, looks about the same now as it did 55 years ago.
Today, the Democratic Party’s vanguard is focused on a new war – against prosperity. Whereas the war on poverty aimed to lift people up, the mood of the Democrats’ new war on prosperity is to pull people down. Sen. Elizabeth Warren, D-Mass., and Sen. Bernie Sanders, I-Vt., rail against the “rich and powerful” despite being rich and powerful themselves. To them, the risk-taking and success that define the American Dream are economic vices that government must eradicate.
This isn’t just a war of words. Democrats are unveiling muscular new policies designed to crush successful companies and tear down the prosperous. For example, Democrats are jumping on the bandwagon to dismantle America’s leading tech companies. That would be a big boost to foreign competitors like Samsung and Alibaba, but it’s hard to see how American workers employed by these companies (not to mention consumers) would benefit.
Democrats have also declared war on America’s financial markets. When Sen. Cory Booker, D-N.J., called for raising taxes on capital gains, Sen. Ron Wyden, D-Ore., upped the ante by introducing a plan to tax even unrealized capital gains – eliminating any incentive for long-term investing. Warren wants to put business leaders in prison for their companies’ regulatory lapses, even for mere negligence rather than criminal behavior. Risk-taking and innovation, so important to the vitality of our financial markets, would dry up – choking our economy.
The Democrats’ greatest passion, however, is for confiscating wealth from those who have a lot of it. Even though the top one percent pays more in taxes than the bottom ninety percent combined, Democrats want them to pay much, much more. Warren and Beto O’Rourke would impose a first-ever “wealth tax” on personal fortunes above $50 million. Whatever the government didn’t take from the wealthy while they were alive would be ransacked by a new 77 percent death tax pushed by Sanders, hitting family farmers and capital-intensive small businesses the hardest.
Punitive tax policies often backfire: France repealed a Warren-style wealth tax after it saw 200 billion euros in capital flee the country over 10 years. So did Sweden. But the real goal of the Democrats’ soak-the-rich schemes appears to be not revenue but social engineering through radical economic leveling. Left-wing phenom Stacey Abrams said as much in a recent interview: “The structure of our tax policy in America is the most direct form of social engineering that we have and the least investigated.” Abrams sees “structural inequality” in society as the vital concern of tax policy, not revenue-raising.
The problem with the Democrats’ war on prosperity is that it won’t make life better for the have-nots, even if they drag the haves down to the same level. “In socialism, the rich will be poorer – but the poor will also be poorer,” said Thomas Peterffy, who fled the deadening hand of government in his native Hungary for a new life in America. More stifling regulation, less private investment and less incentive to work hard and save would leach prosperity away from our country. That would hurt not just the wealthy but also the middle class.
Democrats don’t like the “socialist” label but that’s where their anti-prosperity policies would take us. Fifty-five years ago, Democrats launched an ambitious war on poverty. It was a costly failure. In 2020, Americans will get to vote on whether the Democrats’ war on prosperity should be allowed to succeed. We can’t risk giving them that chance.