— Murshed Zaheed ?? (@murshedz) September 10, 2019
As someone in the financial services business, my theory has always been that what scares finance types most is that she understands the business better than they’d like and knows where the bodies are buried. THAT is what scares them, not the lefty policies.
— Arnold Layne (@arnielayne) September 11, 2019
"Eat the rich and elect President Warren" needs to go on some rogue merch immediately https://t.co/eyW9cTB8bI
— laura olin (@lauraolin) September 11, 2019
The New Yorker‘s economics correspondent John Cassidy, no wild-eyed radical:
As Senator Elizabeth Warren prepares for Thursday’s Democratic debate, in Houston, she is the first viable contender for the Presidency in decades to have proposed a direct tax on wealth. In January, she unveiled a plan to assess a two-per-cent levy on fortunes greater than fifty million dollars and to tax three cents on every dollar of wealth exceeding a billion dollars. Since then, economists have been debating the proposal’s practicality and desirability. During a conference at the Brookings Institution in Washington last week, some of the main protagonists faced off. Many of the technical issues that they raised were important, but to me the main thing that came across was the groundbreaking nature of Warren’s proposal.
In theory, the United States already taxes wealth—the stock of cash, financial instruments, real estate, equity in private businesses, and consumer durables—through the estate tax. But this levy applies to wealth accumulated over a lifetime, and the high marginal rate on large bequests (currently forty per cent) has prompted a great deal of avoidance (some legal, some illegal) and political opposition. In 2001, a Republican-controlled Congress passed legislation to get rid of the estate tax completely. That law expired in 2010, and the tax was resurrected in an even weaker form. Trump and the G.O.P.’s tax reforms of 2017 further reduced the estate tax’s impact by doubling the exemption threshold.
Rather than trying to eliminate some of the estate tax’s loopholes, which the Obama Administration proposed, Warren put forward a new tax that has the dual political advantages of sounding modest (two cents on the dollar) and, if it works as advertised, bringing in a lot of revenue—$2.75 trillion over ten years, the campaign says. Unlike the estate tax, it would be paid annually and applied to a base—those with the largest fortunes in the country—that has grown enormously over the past four decades, driven by soaring asset prices and a sharp rise in wealth concentration, especially at the very top.
At the Brookings conference, Emmanuel Saez and Gabriel Zucman, two economists from Berkeley who advised Warren on her tax plan, presented a paper in which they estimated that the richest 0.1 per cent of U.S. households (there are about a hundred and seventy-five thousand of them) own about twenty per cent of over-all wealth, compared to less than ten per cent in 1980. In the past forty years, the wealth of the richest four hundred households has quadrupled to 3.5 per cent, Zucman calculated, in a study based on the current and post versions of the Forbes 400 list. This huge accumulation of riches has changed the fiscal calculus. A two-per-cent wealth tax applied to a family’s lifetime savings of a quarter of a million dollars raises five thousand dollars. The same tax applied to a billion-dollar fortune raises twenty million dollars. If it is applied every year for twenty years, it raises four hundred million dollars…
Over time, the cumulative effect of the wealth tax would make a big difference in how wealth is distributed… “The wealth share of the top 400 has increased from less than 1% in 1982 to almost 3.5% in 2018,” Saez and Zucman noted in the lengthy paper they presented at the conference. “With a moderate wealth tax in place since 1982, their wealth share would have been around 2% in 2018.” According to the authors’ calculations, the impact on some of the very richest people in the country would be even more dramatic. If a version of the Warren tax had been in effect since 1982, Jeff Bezos would be worth $86.8 billion rather than a hundred and sixty billion. Bill Gates would be worth $36.4 billion rather than ninety-seven billion. And Buffett would be worth $29.6 billion rather than $88.3 billion…
… [T]o be effective, Warren’s wealth tax would need to be vigorously enforced, confined to the ultra-rich, and safeguarded from congressional attacks.
But for all these complications, the arguments for taxing wealth directly remain strong. If you believe, as Barack Obama said in 2013, that rising inequality is the defining issue of our time, you are obliged to try to do something about it. Warren has taken up the challenge, and the enactment of her wealth tax would be a historic step, akin to the introduction of the personal income tax, in 1913. Properly enforced and supported by other measures, such as meaningful campaign-finance reform and an effective antitrust policy, the new tax could help reverse America’s descent into plutocracy. At least, that is the argument that Warren will be making in Houston and beyond.
Numbers & charts detailed at the link.
watching dem leadership shambles, I am reminded that one of my absolutely favorite things about @ewarren is she is living in 2020
there's no sense that she wants to go back to 1996 or 2008 or even 2016
she understands the problems that we face today and it's pretty rare
— Dorothy "DC statehood now" Fortenberry (@Dorothy410berry) September 11, 2019