Richest Americans Could Lose Hundreds Of Billions Of Dollars Under Warren Wealth Tax
If Elizabeth Warren were to succeed in winning the Democratic nomination, then improbably go on to defeat President Trump in the general election, the wealthiest Americans could collectively lose hundreds of billions of dollars to her “wealth tax” over a span of decades.
Two French economists recently published their calculations in a paper where they gamed out the impact of Warren’s wealth tax on the top 15 richest Americans. They found that these families would have seen their net worth decline by more than half to $453.9 billion, had Warren’s plan been in place since 1982.
The paper was published by Cal Berkeley professors Emmanuel Saez and Gabriel Zucman.
Though their paper relies on some assumptions, its findings raise some interesting questions ahead of Thursday’s debate among Democratic Party presidential contenders, as the country debates what should be done to address yawning income and wealth inequality, according to Bloomberg.
To be sure, the authors calculations also don’t take into account any steps billionaires might take to reduce their exposure to the tax, including saving less or giving more money.
Over the time frame explored by the study, Amazon founder Jeff Bezos’ $160 billion fortune (before his divorce settlement) would have been reduced to $86.8 billion.
Meanwhile, Microsoft Corp. founder Bill Gates would have seen his $97 billion fortune shrink to just $36.4 billion.
The economists’ calculations show how a wealth tax of just a few percentage points might erode individual fortunes over time.
Of course, billionaires of more recent vintage would experience smaller declines in net worth because they would have been subject to the tax for shorter periods of time.
Warren has proposed that the wealthiest 75,000 households pay an annual tax of 2% on each dollar of their net worth above $50 million. This sum would rise to 3% on every dollar above $1 billion. Warren insists this would combat rising wealth inequality.
Critics claim that the tax would be difficult to administer and easy to avoid.
The two economists used figures tabulated by Forbes Magazine to establish individuals’ net worth.
Tue, 09/10/2019 – 22:05