Wealth Taxes Promise More Than They Can Deliver: Editorial

Wealth taxes were once common among advanced economies. Nearly all turned against them as costly to administer, easy to avoid and punitive toward investment. Unfortunately, politicians from Copenhagen to California are considering the idea once again.

Denmark’s prime minister made a 0.5% annual levy on net assets above 25 million kroner ($3.9 million) a key plank of her recent election campaign, arguing it would narrow the country’s wealth gap. Other Danish parties on the left want to go further. Wealth taxes have also been a focus of debate in New York City, the Netherlands and France, as well as within Britain’s Labour Party.

Many of these ...