Below is my column in the Wall Street Journal on the bizarre claim of Gov. Gavin Newsom and others that the Framers would have supported wealth taxes, including the proposed Billionaire’s Tax. It is a claim that seeks to mask the economically unwise with the historically unfounded. The Framers sought to protect property from legislative redistributive impulses. James Madison wrote that the bicameral system, and particularly the Senate, “ought to be so constituted as to protect the minority of the opulent against the majority.” That does not sound like an ally of Bernie Sanders and Ro Khanna.
Was James Madison the Zohran Mamdani of his time? Gavin Newsom appears to think so. In joining the growing number of Democratic leaders supporting a wealth tax, the California governor claimed that the U.S. Constitution and our Founders were all about wealth distribution: “The system America’s founders built,” he said, “was designed to prevent the concentration of power in a few hands, but we have allowed that concentration to happen anyway, slowly, in plain sight, over decades.”
The only problem with this argument is that it is utterly and demonstrably false. The Madisonian democracy is designed to avoid the concentration of political power, not the concentration of wealth.
The Founders were great believers in capitalism and the free market. In my recent book, “Rage and the Republic,” I discuss the economic philosophy of the Founders in exploring the history and future of this unique republic. This isn’t simply the 250th anniversary of the Declaration of Independence but also the anniversary of the publication of Adam Smith’s “The Wealth of Nations,” which the Founders embraced.
Many of the Founders were themselves quite wealthy, including banker Robert Morris Jr., who was known as the “Financier of the Revolution” and would be a billionaire today.
Our revolution was the first true Enlightenment revolution, heavily influenced by writers such as John Locke, who believed in a natural right to property. That right came not from the government, but from God, and “excludes the common right of other Men.”
That Lockean principle was manifest in George Mason’s Virginia Declaration of Rights, which was a basis for the Declaration of Independence. It extolled “the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.”
James Madison drafted protections from government seizure of property, including the Takings Clause of the Fifth Amendment, which requires compensation for any property taken by the government.
The Constitution not only protects property, but was later amended to allow for income taxes rather than wealth taxes.
Far from supporting a wealth tax, the constitutional system referenced by Mr. Newsom makes a federal wealth tax unconstitutional.
Mr. Newsom’s recent endorsement of a national wealth tax was likely meant to blunt the outrage over his opposition to the resolution to create a state Billionaires’ Tax on the coming November ballot.
California has reportedly lost trillions of dollars in the exodus of billionaires and other wealthy taxpayers fleeing the high taxes and class politics of the state. Mr. Newsom knows that this draining of wealth spells doom for his state, which is already grappling with a massive, growing deficit. He offered a curious argument for opposing the state wealth tax: “You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do.”
The argument suggested that most citizens are effectively a captive population to be culled by California leaders, dupes who are unable to escape a state with a deadly combination of some of the highest taxes and highest living costs in the nation.
Unions and others pushed the Billionaire Tax to avoid budget cuts and fund the state’s runaway expenditures, from pension funds to projects such as the infamous high-speed train to nowhere.
To deal with California’s reverse Gold Rush, drafters made the proposed Billionaire Tax retroactive to claw back money from those who have escaped.
The national Billionaire Tax pushed by Sens. Bernie Sanders (I., Vt.) and Elizabeth Warren (D., Mass.) seeks to cut off any escape for the wealthy short of leaving the country. When she ran for president, Ms. Warren warned the wealthy that she was coming for “your Rembrandts, your stock portfolio, your diamonds and your yachts.”
Of course, this assumes that the wealthy would be little more than passive prey in a hunt by the Internal Revenue Service. That is precisely what socialists thought in France decades ago, before an exodus from the country that, along with other socialist policies, brought it to near economic ruin. It was later rescinded.
Nevertheless, wealth taxes make for great politics. What is concerning is that, in addition to a wealth tax, Democratic leaders like Ms. Warren are pledging to pack the Supreme Court if they retake power. A packed court with an insistent liberal majority would let the Democrats push through measures that would otherwise be declared unconstitutional, including a wealth tax.
Congress could then gradually lower the level of wealth needed to trigger the tax, opening up the homes and estates of citizens as an untapped reservoir of money for the taking.
“You’re next” could then apply not just to office holders but to property owners in a push to redistribute wealth.
That strategy may well unfold in coming years, but it will be the realization of a Mamdanian, not a Madisonian, system.
Mr. Turley is a law professor at George Washington University and author of “Rage and the Republic: The Unfinished Story of the American Revolution.”
Here's a good article. This really encompasses how bad of an idea it is.
