Senator Warren plans to stifle the influence of big businesses and several CEOs. The Senator is not a fan of Wall Street or corporations, especially large firms and their CEOs. Many folks agree with her. They see several CEOs collect massive bonuses even as their decisions hurt consumers and other stakeholders. To fix these problems, Senator Warren introduced bills in the Senate to establish a wealth tax on individuals, to enhance accountability for CEOs, and to set the framework to break up large tech companies.
While the status quo is unacceptable, the Senator’s proposals do not deal with central issues. Thus, if these bills pass as is, they will discourage innovation and creativity and dampen economic development.
Before discussing these proposals, let’s look at the Senator’s background. Senator Elizabeth Warren was a law professor for more than 30 years, including nearly 20 years as the Leo Gottlieb Professor of Law at Harvard Law School. She was President Obama’s advisor and a principal architect find ceo address of the Consumer Financial Protection Bureau. Following the Great Recession in 2008, she chaired the congressional oversight panel of the Troubled Asset Relief Program (TARP). The Senator has been an outspoken critic of business, and a strong consumer advocate.
To be sure, we must protect consumers from abusive companies, but Senator Warren’s proposals won’t fix the targeted problems and might hinder economic growth.
Senator Warren’s Wealth Tax
Senator Warren, who does not identify as a socialist, proposes a two percent wealth tax on Americans with assets above $50 million, rising to three percent on assets more than $1 billion.
No doubt, inequality is an issue; however, we do not fix the underlying causes by taxing the wealthy. First, we must identify the systemic problems. Specifically, we should learn why there isn’t an acceptable sustained rise in lower income levels. In Warren’s proposal we narrow the income gap by taking from the wealthy, and later redistributing the amount seized to lower rungs. How does this approach solve the endemic problem? It doesn’t! Among other things, it ignores incentives to create jobs and wealth.
Taxing the wealthy doesn’t fix the problem. Admittedly, it will increase tax revenues; but governments will create more programs, hire more people, and become even more creative with wasteful spendingThen again, Warren and her husband earned $905,000 in 2018, which puts them in the top one percent of wage earners. Should they redistribute some of their incomes? Certainly not! But Senator Warren’s rhetoric might lead some folks to think she should because her income is enormous. Warren and her fellow Democrats, wittingly or unwittingly, promote identity politics, exacerbate class warfare, victimhood, and entitlement.
Senator Warren and CEOs Accountability
It’s vital Americans and Canadians identify the causes of income inequality and fix them. But whatever solutions we develop, they must stress wealth creation by all in society, not wealth redistribution. Without a doubt, redistributing wealth from the top will discourage wealth and job creation. The message that the Senator is sending to people aspiring to be the next Bill Gates, Warren Buffet, or Jeff Bezos is simple: Though you might work hard to develop businesses that create millions of jobs, expand the economy, and you plan to donate most of your wealth to charity, the government prefers to redistribute your wealth. Is this what we want to communicate to the next generation of entrepreneurs?
One of the bills Senator Warren introduced is the Corporate Executive Accountability Act , “Which holds executives of large corporations criminally responsible when their companies commit crimes, harm large numbers of Americans through civil violations, or repeatedly violate federal law.” As well, Senator Warren reintroduced the Ending Too Big to Jail Act, a comprehensive bill to hold big bank executives accountable when the banks they lead break the law.