Think on the Margin
By David Henderson
Donald Trump’s potential candidacy for President reminds me of a proposal he made in 1999 and Bruce Bartlett’s analysis of his proposal in the Wall Street Journal. Trump had proposed a one-time 14.25% net-worth tax on those with a net worth of $10 million or more.
Here’s a question I asked about Bartlett’s column in a problem set I gave my students:
Midway through the column, the author states, “that means that anyone with assets between $10 million and $11.425 million would have an enormous incentive to give away $1.425 million.” Is he correct? Explain why or why not. [HINT: think carefully on the margin.]