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Presidential candidate Elizabeth Warren plans to impose a new tax on wealthier American households. (Photo AP / Carlos Giusti)
Sen. Elizabeth Warren (D-Mass.) Will propose a new annual "wealth tax" to Americans with more than $ 50 million in assets, according to an economist advising her on the project, as Democratic leaders vie for power increasingly aggressive solutions to cope with the surge of the country's wealth. inequality.
Emmanuel Saez and Gabriel Zucman, two left-wing economists at the University of California at Berkeley, advise Warren to propose a 2% wealth tax to Americans with assets in excess of $ 50 million . A 3% wealth tax on those who have more than a billion dollars, according to Saez.
The wealth tax would generate $ 2.75 billion over a ten-year period from about 75,000 families, or less Saez said: " 0.1% of US households.
Warren's campaign did not want to comment on the details of the plan.
"The Warren wealth tax is very high. We think this could have a significant impact on the concentration of wealth in the long run, "said Saez in an interview. "It's a very interesting development that has deep-rooted causes: the fact that inequality has increased so much, especially with respect to wealth, and the feeling that our current tax system is not doing a very good job of taxing people. the richest people. "
Warren's proposal includes least three new mechanisms to fight tax evasion, according to a person familiar with the plan. These represent a significant increase in the funding of the Internal Revenue Service; a mandatory audit rate requiring that a number of people who pay the wealth tax be audited annually; and a single tax penalty for those with more than $ 50 million and are trying to give up their American citizenship.
Warren's wealth tax proposal reflects the left wing drift of the Democratic Party in economic policy and fiscal matters. Democratic politicians have always refused to come up with ways to generate revenue for fear of being labeled "taxing and spending liberals," said Jim Manley, assistant to the former Senate Majority Leader. , Harry M. Reid (D-Nev.).
Earlier this week, Saez and Zucman published an editorial in The New York Times about the Rep. Alexandria Ocasio-Cortez (DN.Y.) to increase marginal tax rates to 70% on revenues greater than $ 10 million. Economists have said it will help tackle a "crisis of inequality" similar to climate change.
"It's a pretty dramatic change that shows how much the party has evolved," Manley said. "It's not where everyone in the party is, but it's a lot of people."
Republicans are likely to seize the plan as another example of Democrats seeking to tax hard-earned gains by Americans, even if they would. apply to only a tiny percentage of the population. In their major tax redesign in December 2017, Republicans had significantly exceeded the threshold of federal inheritance tax exemptions and had assets of $ 11.4 million (in 2019) or less. They have often described this provision, which concerns several families a year, as a "death tax".
Saez said the proposal was quickly consolidated in the last two weeks, adding that economists have spent years thinking about the
Saez and Zucman had initially evaluated a proposal at the request of Warren aiming to levy a 1% wealth tax on income greater than $ 10 million, rather than a 2% wealth tax over $ 50 million, according to a January 14 letter the economists sent to Warren. This letter was obtained by the Washington Post.
According to people familiar with the case, the Warren team has considered many proposals at different rates.
In recent decades, wealth taxation has fallen out of favor among the richest in the world. countries. In 1990, 12 member countries of the Organization for Economic Co-operation and Development imposed some form of wealth tax.
In 2017, this number was more than four: France, Norway, Spain and Switzerland. According to the OECD, this decline has resulted in lower taxation of high incomes and increased inequality.
The OECD report concludes that the benefits of a wealth tax depend in part on how a country taxes capital gains – income from capital – and estates. Overall, he recommends that "the tax exemption thresholds be high to ensure that the net wealth tax is levied only on the very rich" and that "tax rates are high". Taxes are low and take into account tax rates on capital income in order to avoid imposing excessively high rates. " tax charges on capital to prevent capital flight. "
Estimates of how much money can be collected by taxing the very rich vary considerably." The Institute on Taxation and Economic Policy, a left-wing think tank, published a report on the Wednesday, noting that a 1% wealth tax on the wealthiest Americans (0.1%) would raise $ 1,300 billion over 10 years, which would affect US households whose wealth exceeds 32 , $ 2 million.
But the Conservatives warned that high taxes on the very rich would wreck growth, which led to a flight of capital and produced relatively minor earnings gains. Right Tax Foundation discovered that the Ocasio-Cortez plan aiming for a 70% tax rate would only raise $ 189 billion in revenue over 10 years or lose $ 63.5 billion from the government.
The Tax Foundation also warned against the wealth tax, saying that "capital accumulation is an essential part of economic growth," that inequality of wealth does not hurt the economy and this wealth reward entrepreneurs who take risks.
Christopher Ingraham for the Washington Post
The 1% of the richest families are currently subject to a total tax burden of about 3.2%, including local and national taxes, compared to wealth, write in their report. According to economists, the 99% of the most disadvantaged families currently weigh 7.2% of their tax burden, according to economists.
wealth, "wrote Saez and Zucman to Warren in their January 14 letter. "The 1% share of wealth has increased significantly, from around 22% in the late 1970s to around 40% in recent years. Conversely, the wealth share of the 95% of the poorest families increased from about 50% in the late 1970s to about 40% today. "
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