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Sen. Elizabeth Warren (D-Mass.) opened her 2020 campaign with a wealth tax policy proposal that was inspired by University of California-Berkeley economists Emmanuel Saez and Gabriel Zucman. The plan would tax the wealthiest Americans on their assets.
Key details
- Annual 2% tax on assets above a taxpayer's first $50 million, and 3% on assets that exceed $1 billion.
- The wealth tax would raise an estimated $2.75 trillion over 10 years from 75,000 families.
- Warren is branding it as the "Ultra-Millionaire Tax."
- To fight tax evasion, the policy would bolster the IRS budget, install a minimum audit rate for the very rich and add a 40% "exit tax" on the very rich who try to give up U.S. citizenship.
- Warren has also proposed a universal child care program that would use revenues from the wealth tax to provide public and family-run centers to guarantee care from birth until schooling age.
Arguments in favor of Elizabeth Warren's wealth tax
- Addresses glaring wealth inequality.
- Gets to the heart of people's wealth: Assets instead of income.
- Added source of government revenue for child care proposal and other programs.
- Combats tax evasion.
Arguments opposed to Elizabeth Warren's wealth tax
- Could be unconstitutional.
- Opposition to redistributive tax policies.
- Risk of motivating rich taxpayers to go to other countries or maneuver to hide their wealth.
- Difficulty of valuing wealth on an annual basis (art collections, family-run businesses).
- Unrealistic to get through Congress.
- Administrative difficulty.
Go deeper: Everything you need to know about Elizabeth Warren