Caputi: Investment, economic development will suffer under an asset tax

At a time when our city, like so many others, is working hard to boost the local economy, President Biden’s new budget proposal includes a tax that would directly discourage investment and have a chilling effect on new projects and job creation. A federal asset tax is not the way to go.

Like many cities in Arizona, Scottsdale has grown over the last decade. Making sure our citizens, old and new, can find quality jobs is a top priority and we actively search for companies and individual investors who can contribute to our economy.

A federal tax on the estimated increase in value of unsold assets, as President Biden has proposed, would make our city’s economic development mission harder to accomplish. Income taxes are one thing, but assessing a tax on assets that are just being held by successful investors is something entirely different.

Although the federal asset tax is supposedly aimed at only very high-income people (however with no guarantee that wouldn’t change in the future) its effects would filter down to middle and even lower-income families. Wealthy people don’t just stockpile their money, they invest it in businesses that provide countless jobs for other Americans.

Taking capital away from private sector investors inevitably results in fewer jobs and lower wages for the jobs that are left. Studies of other tax plans similar to the new federal asset tax estimate a negative impact on investment and innovation of over $1 trillion.

Like many other Arizonans, I’m hopeful and confident that our senior U.S. Senator Kyrsten Sinema will take a strong leadership role in opposing the federal asset tax. She’s has been a voice of reason and moderation in our state, often serving as a backstop to excessive policies that would harm our economy.