This is an AI-written (but human-edited) summary of Gary’s recent video: Why The Economist Hates Wealth Taxes

Wealth taxes are on the cover of The Economist this week. Zack Polanski and Zohran Mamdani are pictured. The magazine is against them.

We’ve read it so you don’t have to.

What The Economist Says

The Economist runs two articles on wealth taxes and barely bothers to argue against them. The substantive objections amount to two sentences: wealth taxes would be “confiscatory,” and “seizing the assets of society’s most productive people is a road to economic ruin.”

Gary takes each apart in turn. Every tax is confiscatory by definition — that is what tax is. And the claim that billionaires are “society’s most productive people” is clearly false in an economy where the primary route to owning assets is inheriting them from your parents. We used to be a country where ordinary working people could buy property. Now we’re a country where you can only inherit it. Who, exactly, is seizing whose assets?

But neither of these is the most interesting thing in the article. The most interesting thing is what The Economist proposes instead.

Inheritance Tax

Having argued forcefully against wealth taxes, The Economist calls for “broader-based inheritance taxes” to prevent “inheritocracy” from replacing meritocracy. Gary finds this position not just wrong but revealing — and he has heard it before.

In the past year of lobbying politicians, economists, and tax experts, he has encountered this exact argument twice in private meetings with influential figures. “Wealth taxes will never work,” they told him. “What we need is inheritance taxes.” Both times, his reaction was the same: this makes no sense.

How we can stop growing wealth inequality

An inheritance tax is a tax on accumulated wealth. It’s the same thing as a wealth tax.

The only difference is timing. A wealth tax takes 1% of a billionaire’s wealth each year. A 50% inheritance tax takes it every thirty years or so when the billionaire dies.

Over the long run, these are roughly equivalent. So how can anyone be viscerally opposed to taxing the richest 1% of their wealth annually, while simultaneously supporting taxing them 50% every three decades? Either they don’t understand what they’re saying, or they don’t want you to understand it.

Motivated Reasoning

Gary’s conclusion, drawn from those private meetings, is the latter. The term for it is motivated reasoning: rather than working out what is true, you construct an argument that leads to the answer you already want.

The answer these people want is: don’t tax my wealth. And they know that effective inheritance taxes, widely loathed by the public, are a safe thing to endorse precisely because they will never actually happen.

Calling for inheritance taxes is a way of appearing to support taxing the rich while actively ensuring that taxing the rich does not occur.

This is the intellectual class at work. They are not confused. They are covering their tracks.

Why This Matters for Everyone

Gary widens the argument beyond ideology. Taxing the super-rich is not a left-wing idea. It is the only mechanism by which ordinary people can continue to own anything.

Under the current tax system, workers pay up to 70% in marginal tax. Billionaires — whose wealth comes not from income but from the compounding return on assets — pay around 20%. The wealth gap between these groups grows every single year.

Left unchecked, compound interest is mathematically guaranteed to concentrate ownership of everything into a small number of hands. Your children will not be able to buy a house. Your grandchildren will not either.

In the absence of taxing the very rich, the government has two options: tax ordinary workers even more, or dismantle the welfare state. We are already living this: the UK has the highest taxes in a generation and a welfare state that is visibly shrinking. These things are connected.

What It Means That They’re Fighting Us

The appearance of wealth taxes on the front cover of The Economist is, in Gary’s reading, good news.

The Economist is running this coverage because it is scared. The ideas it once dismissed as fringe have reached the point where they might actually influence a governing party. Its response — tie itself in knots by simultaneously opposing wealth taxes and supporting their economic equivalent — exposes not strength but panic.

It follows the pattern Gary has described before. Ignored for years. Laughed at for most of the last year. Now, after Gabriel Zucman’s open letter signed by seven Nobel laureates, the laughing has stopped. They have to fight it. And they are fighting it by publicly exposing the incoherence of their own position.

That is where we are. Keep sharing the message. If you don’t deal with inequality, you cannot improve living standards. The only way to deal with inequality is taxation of the very rich.