The unserious virtue signaling of Elizabeth Warren's wealth tax

In its rush to punish the rich, the plan gambles with American prosperity. Here's why.

Sen. Elizabeth Warren
(Image credit: Illustrated | Justin Sullivan/Getty Images, phochi/iStock)

Why does Elizabeth Warren want to hit America's 75,000 richest families with a $3 trillion wealth tax? Ostensibly to pay for stuff. Stuff that would supposedly create "an economy that works for everyone," as she puts it. And in the presidential candidate's view, that expensive effort means pricey new federal programs such as universal childcare and student loan debt relief. All paid for through her annual 2 percent levy on fortunes above $50 million, plus an extra 1 percent on wealth excess of $1 billion.

Those tax rates may seem modest. After all, the top personal income tax rate is 37 percent and progressives now routinely raise the prospect in increasing it to 50 percent or even much higher. But this would hardly be a minor tax of merely symbolic importance. A calculation by Emmanuel Saez and Gabriel Zucman — the University of California, Berkeley economists who helped devise Warren's plan — shows the 15 richest Americans would see a 54 percent reduction in their net worth, to $434 billion from just under $1 trillion if the scheme had been in place since 1982. (A more radical version contemplated by the advisers, a 10 percent tax on billionaires, would reduce that amassed wealth by nearly 90 percent.) And overall under the plan, the total share of national wealth owned by the 400 richest Americans would be reduced to about 2 percent from 3.5 percent currently.

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