Home / US / Elizabeth Warren proposes to propose new wealth tax for very rich Americans, says the economist

Elizabeth Warren proposes to propose new wealth tax for very rich Americans, says the economist

Presidential candidate Elizabeth Warren is considering a new tax on the richest American households. (AP Photo / Carlos Giusti)

Sen. Elizabeth Warren (D-Mass.) Will propose a new annual "wealth tax" for Americans with assets in excess of $ 50 million, according to an economist who advises them on this plan, as Democrats' leaders are calling for more and more aggressive solutions inequality fight for the nation's rising wealth.

Emmanuel Saez and Gabriel Zucman, two leftist economists at the University of California, Berkeley, advised Warren on a proposal to impose a tax on Americans with assets in excess of $ 50 million and assets of 2 percent 3 Percent wealth tax on those who have more than a billion dollars, says Saez.

The wealth tax would bring $ 2.75 trillion over a ten-year period from about 75,000 families or less to 0.1 percent of US households, Saez said.

Warren's campaign declined to comment on details of the plan.

"The Warren property tax is pretty big. We believe that this can have a significant impact on asset concentration in the long term, "Saez said in an interview. "This is a very interesting development with deep causes, the fact that inequality is increasing, especially in the area of ​​wealth, and the feeling that our current tax system does not do the very richest people very well."

Warren's proposal includes at least three new mechanisms to combat tax evasion, according to a person familiar with the plan. This is a significant increase in funding for the Internal Revenue Service. a mandatory examination rate, which requires that a certain number of persons paying wealth tax be audited annually; and a one-off tax fine for those who have more than $ 50 million and are trying to give up their US citizenship.

Warren's proposal on wealth tax reflects the leftist demise of the Democratic Party on economic and fiscal issues. Democratic politicians have traditionally shied away from suggesting how they could generate revenue for fear of liberalization as "taxes and expenditures," said Jim Manley, the former Senate Majority Leader, Harry M. Reid (D-Nev.), Advisor had served.

Earlier this week, Saez and Zucman published in the New York Times a proposal to raise marginal tax rates to 70 per cent over $ 10 million on the proposal by Alexandria Ocasio-Cortez (DN.Y.) Plan Economists said they would help tackle an "inequality crisis" similar to climate change.

"It's a pretty dramatic change that shows how much the party has developed," Manley said. "It's not the place everybody's in the party now, but it's a lot of people."

The Republicans are likely to use the plan as another example of Democrats wanting to punish the hard-won gains of Americans, even if that were the case for a tiny percentage of the population. In their comprehensive overhaul in December 2017, Republicans have significantly raised the threshold for estate tax by exempting $ 11.4 million (in 2019) or less of property with real estate. This provision, which affects several families each year, has often been referred to as the "death tax".

Saez said the proposal had come together swiftly in the last two weeks and economists had been thinking about it for years

Saez and Zucman first appealed to Warren for an income tax of 1 percent to over US $ 10 million. Instead of a 2 percent wealth tax of 50 million dollars, according to a letter dated 14 January, economists sent to Warren. This letter was received by the Washington Post.

In the opinion of the people who are familiar with the matter, the Warrens team considered several different proposals with different sentences.

In recent decades, the taxation of wealth has fallen into disfavor among the world's richest countries. In 1990, twelve member states of the Organization for Economic Cooperation and Development imposed a form of wealth tax.

By 2017 there were only four left: France, Norway, Spain and Switzerland. According to the OECD, this decline is reflected in a decline in high-income taxation and an increase in inequality.

The OECD report concludes that the benefits of a wealth tax depend, in part, on how a country taxes tax on capital gains – the returns on capital – and the rebates. Overall, it recommends that "the tax exemption thresholds should be high to ensure that the net wealth tax is collected only by very wealthy individuals" and that "tax rates should be low and take account of capital gains tax rates to exaggerate tax liability Avoid tax burdens on capital to prevent capital flight. Estimates of how much money can be raised by taxing the rich vary dramatically. "The Institute of Taxation and Economic Policy, a left-wing think tank, published a report on Wednesday that it was determined that a wealth tax of 1 percent for The richest 0.1 percent of Americans would spend $ 1.3 trillion over a decade, which would affect US households with assets in excess of $ 32.2 million.

But the Conservatives warned The right-wing tax foundation found that the Ocasio-Cortez plan for a tax rate of 70 percent would either be the only case in revenue Amount of $ 189 billion over a 10-year period or a federal loss of $ 63.5 billion ar.

The Tax Foundation also warned against the taxation of wealth, arguing that "capital accumulation is an integral part of economic growth," that inequality of wealth does not harm the economy, and this wealth rewards entrepreneurs who take risks.

Christopher Ingraham for the Washington Post

Since announced its presidential candidacy, Warren has stood up to the elite, arguing that "billionaires and large corporations" have manipulated the political and economic system to their advantage. The possibility of a wealth tax proposal is added to their plan to force companies to have 40 percent of their board selected by company employees and their support for Sen. Bernie Sanders' (I-Vt.) Plan "Medicare-for-all "by nationalization of the health insurance industry.

The richest 1 percent of families currently face a total tax burden, including state and local taxes of around 3.2 percent on wealth, write Saez and Zucman The lower 99 percent of families currently have a tax burden of 7, 2 percent in terms of their assets, according to the economists.

"One of the main motives for introducing a progressive wealth tax is to reduce the growing concentration of wealth," Saez and Zucman wrote in their January 14 letter to Warren. "The upper 1 percent ownership has risen dramatically from about 22 percent in the late 1970s to about 40 percent in recent years. Conversely, the wealth share of the lower 95 percent of families has fallen from about 50 percent in the late 1970s to about 40 percent today. "

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