A new proposal by Senator Bernie Sanders would tax estates over a billion dollars at a 77 percent top marginal rate. Billionaires and conservative politicians were quick to howl, and some mainstream Democrats wrung their hands too.
They’re right to be concerned, but wrong about why. Because the only problem with the Sanders bill is it doesn’t go far enough. To be sure, it would raise billions for worthwhile programs—but not nearly enough to break up extreme fortunes whose very existence threatens our democracy.
Broadly speaking, let’s say there are three kinds of wealth: ordinary wealth, extravagant wealth, and excess wealth.