Elizabeth Warren's Wealth Tax Would Hurt More Than Just the 'Tippy Top'Wealth tax proponents claim only super rich people would be affected. But to raise the revenue Warren, Sanders, and Biden want, they'd have to tax the "working rich"—doctors, lawyers, and other hardworking high earners.
LIZ WOLFE
4.5.2022
When running for president in 2020, Elizabeth Warren championed trustbusting and Medicare for All, the Green New Deal and regulation of big banks. But her plan's pièce de résistance was a proposed "2-cent" tax on "ultra-millionaires." She chirped that it would fall only on the "tippy-top," that tiniest fraction of 1-percenters who have accumulated the most wealth in America. Taxing the wealth of the tippy-top isn't just a Warren concept, though. Just last week, President Joe Biden announced the newest rendition of his budget, which calls for a wealth tax on households worth more than $100 million.
"A family with a net worth of more than $50 million"—or the richest 75,000 households—would "pay a 2% (or 2 cents) tax on every dollar of their net worth above $50 million and a 6% (or 6 cents) tax for every dollar above $1 billion," Warren said. The $3.75 trillion in revenue she hopes to bring in with this tax over the next 10 years would be key to how she plans to pay for other items on her big-government wish list, like canceling student debt and free universal pre-K and Medicare for All.
Other estimates, however, like one from the Tax Foundation, say Warren's tax would bring in only about $2.2 trillion. But her spending plans would cost more than $30 trillion over the next decade according to estimates by The New York Times.
Warren's attempts to make such ambitious spending plans seem easily paid for is a form of smoke and mirrors common to big spenders on the left, even those who aren't tethered to $30 trillion agendas like Biden. These plans, and the rhetoric with which they are promoted, indulge in a fantasy that expansive, expensive progressive agendas can be paid for exclusively by taxing the superrich, without any direct cost to ordinary taxpayers, or even to the affluent.
The reality is that in order to actually raise the amount of money progressives like Warren want to spend, they'd almost certainly need to tax a much larger base: the "working rich."
The "idle rich"—the multimillionaires who progressives like to portray as sitting on huge piles of money they inherited or earned via unsavory means—just aren't large enough to serve as an actually useful tax base. They're some of the wiliest folks around, ready to move money overseas or engage in tricky tactics to avoid the prying hands of the federal government if incentivized to do so. Many countries that have implemented wealth taxes have later reversed those decisions due to capital flight and impracticalities of enforcement, including Austria, France, Sweden, and the Netherlands.
Every time Warren talks about her paid-for wish list proposals, she's talking about taxing the working rich. The reason why it never happens, though, is because it would be political suicide to tax such a key constituency.
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Source:
https://reason.com/2022/04/05/elizabeth-warrens-wealth-tax-would-hurt-more-than-just-the-tippy-top/
