Posted on 12/12/2019 5:07:55 AM PST by karpov
WASHINGTON— Elizabeth Warren’s wealth tax would raise $2.7 trillion over a decade, $1.1 trillion short of her presidential campaign’s estimates, according to a new analysis from the Penn-Wharton Budget Model.
The difference stems in part from disagreement over the pervasiveness of tax avoidance. Still, the new study projects that the wealth tax would raise more money than critics such as former Treasury Secretary Larry Summers have argued, and the analysis suggests it could be a significant new revenue source targeted at very few people.
“This is not nickels and dimes, even in our estimate,” said Kent Smetters, who runs the model at the University of Pennsylvania. “It’s nothing to sneeze at.”
The wealth tax, one of the most hotly debated campaign proposals of the year, has become a populist rallying cry against inequality as well as a funding source for Ms. Warren’s child care, education and Medicare-for-all plans.
The Democratic presidential candidate has proposed a 2% annual “ultra-millionaire tax” on net worth over $50 million and 6% on fortunes of more than $1 billion. Her campaign has estimated the measure would raise $3.8 trillion over a decade.
Several European countries have abandoned wealth taxes, in part because citizens have moved assets abroad. American supporters of the idea say it is easier to fight tax avoidance in the U.S., which taxes its citizens regardless of where they live.
The Penn-Wharton estimate doesn’t incorporate the beefed-up tax enforcement that Ms. Warren contemplates.
“You need a big investment in enforcement apparatus, which has been rather depleted—and Warren has got that in her plan,” said Simon Johnson, an economist at the Massachusetts Institute of Technology’s Sloan School of Management and an informal campaign adviser.
The Penn-Wharton estimate says that a wealth tax would reduce economic growth in the long run by discouraging investment
(Excerpt) Read more at wsj.com ...
I think the effects would be larger.
Well, that sounds harmless. [/s]
Yeah, and it would also kill the golden goose of our economy bringing us down to Venezuela level in no time. She’s an idiot for ever even coming up with such a dumb idea. What does that say about the pinheads that would vote for her?
There is zero legalization for such a tax. The 16th Amendment does not cover this tax. It would take a Constitutional amendment which all these candidates ignore. They are ‘I have a pen and paper’.
I think you are right. And I also think a lot of money would move offshore. Rich people have options.
A 30% shortfall?
Easily compensated for. Just raise the tax!
People never just sit there and take it. Rich people, as you have state, are well-suited to react to a tax like this. And when millions of dollars are at stake, there will be huge incentives to do so.
Gray Beaver has as much of a chance to be President as I have.
And gee, to think that in the days of ones like Carnegie, Rockefeller, Vanderbilt, and such others who were later called “robber barons” by academics it wasn’t just about the huge fortunes that they made, it was also about the huge sums of money those people gave to libraries, education, the performing arts, museums (the Rockefellers with Williamsburg, VA for example), and other such things. And they likely gave that far less to the government in taxes back then.
Some bad ideas are inevitable.
This is one of them. When we reach the demographic tipping point in about a decade class envy is going to completely overtake numbers and logic.
On the other hand, the middle-class person who has worked hard all their life and has maybe $500,000 in a 401K or other market-based investments would likely see at least a 25% reduction in the value of their portfolio - based on estimates of what Warren's tax would do to the stock market. So, their retirement money would be reduced to $375,000. That's a huge reduction for that person.
To be honest, if she were elected, even before any of her policies were enacted there would be a massive shift in investments and a ton of maneuvering that would have dramatic effects on the stability of our economy and the markets.
In her mind that doesn’t matter, because it’s “fair”.
Facing a 6% tax on $1B, behooves one to spend 1% on relocating that $1B to somewhere not subject to the 6%.
$10,000,000 buys a lot of relocation.
“Net worth” is not the same as ready cash to send to the taxman. Most of that worth will be tied up in assests that would have to be liquidated, with corresponding consequences down the chain (lost jobs etc.).
I keep hearing about this wealth tax, but no one ever stops to inform us how they are going to get around Article 1 Section 9 of the constitution.
Article I
Section 9
4: No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.
The sixteenth amendment only provides for taxing incomes, not wealth.
Article XVI (Amendment 16 - Income Tax)
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
Pure theft - most won’t care because it doesn’t include them. Where on earth does anyone think it’s ok to just take money that has already been taxed?
Why won’t she name her plan the “Taxing Ourselves Into Prosperity” plan?
The grandiosity of the left always hurts a ton of people. Lenin, Stalin, Krushchev, Mao, Pol Pot, Castro, Chavez, Maduro, Kim Il-sung, Kim Jong-Il, etc. etc. They all hurt millions. Warren's ego is writing checks that will only be cashed with the suffering of sincere American people.
And raise it only once. The rich will come up with accounting practices and investment strategies to protect their wealth.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.