Such reactions are not new. Even the income tax once looked like an assault on property. The Supreme Court struck one down as unconstitutional in 1895, and it took the 16th Amendment in 1913 to make it ordinary. Taxes on great fortunes may travel the same road and become unremarkable within a decade. Plus, research indicates that the wealthiest households often pay lower effective tax rates than the people who work for them.
I support Proposition 40. But it is not sufficient in addressing the underlying economic issues at hand.
A wealth tax like Proposition 40 tries to recover a share of value long after that value has been created, compounded, and defended. By then, the money has lawyers. Which is why the origins of this extreme wealth matter, now that the prospect of redistribution has so agitated the people holding it.
To understand how these systems work, think of the iPhone. As I argued in my book The Entrepreneurial State, the iPhone’s foundational technologies came from public research: the internet, GPS, the touchscreen, and the voice recognition behind Siri. Speech understanding research at Carnegie Mellon, MIT, and Stanford Research Institute was funded by the Defense Advanced Research Projects Agency (DARPA) in the 1970s. Researchers then spent two more decades on language and learning systems no company would finance, because the payoff lay thirty years out.
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