Warren Gorlick’s Oct. 15 op-ed, “Tax the rich? Follow Switzerland — not the left,” is right that Switzerland’s fiscal model is worth copying. But its wealth tax is the wrong feature to emulate.
The Swiss government is much smaller than ours. According to the Organization for Economic Cooperation and Development, in 2024 total government spending in Switzerland was only about 32.5 percent of gross domestic product, compared with about 39.6 percent in the United States. Swiss voters have also locked in fiscal discipline with a constitutionally required debt brake — a form of balanced-budget rule — that ties spending to projected revenue, permits deficits during downturns and requires the government to run surpluses to pay them back.
Yes, Switzerland also has a low-rate wealth tax, but the rest of its fiscal system offsets the damage. The country generally has no individual capital gains tax, low corporate income taxes, and moderate value-added and individual income taxes. And even with the rest of the system compensating, researchers have found that small decreases in the wealth tax rate have large positive effects on reported wealth.
The lesson from Switzerland is not that the U.S. needs a wealth tax or more revenue. It’s that the U.S. needs to spend less. Switzerland is a model despite its wealth tax, not because of it.
Adam Michel, Washington
The writer is the director of tax policy studies at the Cato Institute.
I read with interest Warren Gorlick’s column proposing a “Swiss-style wealth tax” as a partial solution to America’s outrageous national debt. But Gorlick missed one important problem regarding any wealth tax on the federal level: It would probably be unconstitutional.
Article I, Section 9 of the Constitution forbids any “Capitation, or other direct, Tax … unless in Proportion to the Census or enumeration herein before directed to be taken,” which would make it virtually impossible to construct a constitutional wealth tax. That is why in 1913 the 16th Amendment was needed before the federal government could “lay and collect taxes on incomes,” as the income tax is also a direct tax on individuals.
Gorlick pointed to property taxes as examples of existing wealth taxes. But the federal government does not impose property taxes — only states and local governments do. My shadow has never darkened a law school’s door, but like most (real) conservatives, I believe the Constitution is a keystone to the United States’ successful experiment in limited government. Don’t mess with it. Everybody knows what has to be done to address the soaring national debt. But a wealth tax should not be on the table.
Greg Suchan, Flat Rock, North Carolina
The writer is a former deputy assistant secretary of state in the Bureau of Political-Military Affairs.
Consequences of free money
Regarding the Oct. 11 front-page article “Trump targets voters’ wallets”:
It is worth remembering that offering free money to cope with inflation is not the same as reducing inflation. It’s a recipe for making inflation worse.
After years of higher-than-normal inflation, policies such as victory checks, tariff rebates, stimulus payments, wealth tax dividends or universal basic income can be enticing for voters who want immediate financial relief, as well as for policymakers who want to bolster their popularity. But giving Americans money to be able to afford what they normally purchase does not address the underlying factors spiking prices in the first place. It also creates more demand when producers have less inventory of their products to sell, which pushes them to raise their prices even higher.
Inflation is rising because it is more expensive to produce what consumers want due to factors such as tariffs and higher oil prices. Lasting prosperity comes from tackling inflation at its source, not subsidizing its consequences.
Noah Yosif, Falls Church
Close the ‘tax gap’
The Oct. 11 editorial “What are the best ways to lower the U.S. deficit? Test and find out” listed many ways in which taxes could be raised or government expenditures could be reduced to shrink deficits to a manageable 3 percent of gross domestic product.
Incredibly, the editorial did not mention a productive way to move the needle — namely, enforcing existing tax laws. The Internal Revenue Service has estimated that taxes that are legally due but go unpaid reached roughly $700 billion per year in 2022, the most recent projection available, and the number has possibly grown since then.
Charles Rettig, the IRS commissioner appointed during President Donald Trump’s first term, said in 2021 that he believes the actual amount of unpaid taxes is even higher, possibly exceeding $1 trillion per year.
This shocking revenue shortfall, often referred to as the “tax gap,” was a large part of the impetus for Congress to make substantial investments in the IRS as a part of the 2022 Inflation Reduction Act.
Congress has since clawed back much of the funding provided during Joe Biden’s administration. It should be restored.
An aggressive tax enforcement effort will require additional reporting and investment in IRS technology, including artificial intelligence applications. It will take time to implement these initiatives; the government should start now.
Alexander Boyle, Chevy Chase
The writer is the former vice chairman of the Chevy Chase Bank.
Immigration is an asset
Regarding the Oct. 8 news article “Border counties that swung for Trump may swing back”:
Labor shortages due to Immigration and Customs Enforcement arrests are salt in the wounds caused by President Donald Trump’s immigration policies.
Legal immigration pathways that align with the country’s economic needs would be vastly superior to the current policy of excess enforcement. I contributed to the Game Changers project at the Political Economy Research Institute at the University of Massachusetts at Amherst. As outlined in our policy proposal, immigrants are vital contributors to the United States as workers, taxpayers, entrepreneurs and community members. Immigration policy should treat them as such. Our findings showed that providing a pathway to citizenship could increase U.S. gross domestic product by roughly $1.7 trillion over 10 years and create roughly 438,000 new jobs.
Immigration enforcement spending now exceeds the combined budgets of all other federal law enforcement agencies and diverts public money from basic needs for working Americans. Repurposing those funds to support policies that welcome immigrants and promote their inclusion can strengthen workers, communities and the U.S. economy.
Manuel Pastor, Los Angeles
The writer is a distinguished professor of sociology and American studies and ethnicity at the University of Southern California.
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