Weeks into a national conversation over the possibility of taxing the wealthiest Americans at far higher rates in order to correct severe income inequality in the U.S., Sen. Elizabeth Warren (D-Mass.) made clear that the issue will be addressed in the 2020 presidential election, unveiling a plan to tax assets over $50 million.
Two economists who are advising Warren, Emmanuel Saez and Gabriel Zucman of University of California at Berkeley, announced to the Washington Post that the senator is proposing an annual tax of two percent for assets over $50 million, as well as a three percent tax for assets above $1 billion. The proposal, the economists estimate, would raise $2.75 trillion over 10 years and would affect just .1 percent of American households—raising the percentage at which their wealth is taxed to just 4.3 percent from 3.2 percent.
The “Ultra-Millionaire Tax” would apply to “all household assets…including residences, closely held businesses, assets held in trust, retirement assets, assets held by minor children, and personal property with a value of $50,000 or more,” according to a paper by the economists.
Warren’s proposal, which economist Thomas Piketty recommended in his book “Capital in the Twenty-First Century,” comes weeks after Rep. Alexandria Ocasio-Cortez (D-N.Y.) first told the press about her plan to tax income over $10 million at 70 percent—a proposal supported by a majority of Americans, including 45 percent of Republicans, according to a poll by The Hill.
As journalist David Dayen explained at The Intercept and on Twitter, Warren’s plan would raise more than Ocasio-Cortez’s proposal, which the Post estimates would create $720 billion in tax revenue over a decade.
Some suggested that Warren’s plan represents a clear shift away from Democrats’ fear of pushing to raise taxes, as progressives like Ocasio-Cortez force their colleagues to pay more serious attention to nation’s crisis of economic inequality. If embraced by the party, such a proposal would certainly be an alternative to the Republican Party, which passed a $1.5 trillion tax cut for corporations and the wealthiest Americans in 2017, falsely claiming that working families would benefit from pay raises which never materialized.
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