Elizabeth Warren's proposed tax on enormous fortunes explained

[Yo_Mama_Been_Loggin]

Sen. Elizabeth Warren (D-MA) wants to curb spiraling inequality in the United States and make the rich pay, according to a scoop from Jeff Stein and Christopher Ingraham at the Washington Post.

They report that the UC Berkeley economists Emmanuel Saez and Gabriel Zucman are working with the presidential candidate on designing a proposal to levy a wealth tax on Americans with fortunes worth over $50 million.

Most Americans currently pay property taxes to their local government, a form of a wealth tax. The majority of middle class assets are property. Rich people of course own real estate, but they tend to mostly own shares of stock and other financial assets that largely evade taxation. The French economist Thomas Piketty put wealth taxes back on the intellectual agenda with his influential 2014 book Capital in the 21st Century. Many Democrats have talked about the theme of runaway inequality in recent years, but Warren is the first politician to actually adopt Piketty’s proposed solution.

Saez and Zucman are, not coincidentally, former collaborators of Piketty who have gone on to do their own influential research on the interplay between tax policy and extreme inequality. The basic plan is to levy a 2 percent tax on fortunes worth more than $50 million, and a 3 percent tax on fortunes worth more than $1 billion. According to the post, Saez estimates this tax would hit approximately 75,000 families and raise $2.75 trillion over a 10-year period.

https://www.msn.com/en-us/money/taxes/elizabeth-warrens-proposed-tax-on-enormous-fortunes-explained/ar-BBSHoOX?li=BBnbfcN

[exboyfil]

1. The analogy to property taxes

was one I have been using. I am requesting this book from my library right now.

Thanks for the link.

[Qutzupalotl]

2. Thsnks for this.

I am of two minds on this issue. It makes economic sense to free up capital that is more or less stagnated in less active investments, provided the benefits go to low- and middle-income people. They in turn will spend and thus stimulate the economy more directly, creating demand and fueling growth.

Politically, this will be a tougher sell. This will be seen as goverment “taking” or “confiscating” wealth — which it is — and spun as “punishing success.” We will have to counter that the move is intended to punish hoarding wealth and provide balance to a system that disproportionately benefits the wealthy at the expense of the poor, who are currently getting exploited.

Good on Warren for having the courage to take a bold stand. If anyone can articulate the merits of this proposal and counter the objections, it’s her.