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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ US https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Elizabeth Warren to propose a new 'wealth tax' to very wealthy Americans, economist says

Elizabeth Warren to propose a new 'wealth tax' to very wealthy Americans, economist says




Presidential candidate Elizabeth Warren is considering a new tax on the wealthiest American households. (AP Photo / Carlos Giusti)

Sen. Elizabeth Warren (D-Mass.) Will propose a new annual "wealth tax" on Americans with more than $ 50 million in assets, according to an economist advising her on the plan, as Democratic leaders are keen for increasingly aggressive solutions to the nation's rising wealth

Emmanuel Saez and Gabriel Zucman, two left-leaning economists at the University of California, Berkeley, advised Warren on a proposal to levy a 2 percent wealth tax on Americans with assets over $ 50 million, as well as a


The wealth tax would raise $ 2.75 trillion over a ten-year period from about 75,000 families, or less 0.1 percent of US

Warren's campaign declined to comment on the details of the plan

"The Warren wealth tax is pretty big. We think it could have a significant impact on wealth concentration in the long run, "Saez said in an interview. "This is a very interesting development with deep root causes: the fact of inequality has been increasing so much, especially in wealth, and the feeling that our current tax system does not do a very good job of taxing the very richest people."

Warren's proposal includes at least three new mechanisms to combat tax evasion, according to a person familiar with the plan. These are a significant increase in funding for the Internal Revenue Service; a mandatory audit rate requiring a certain number of people who pay the wealth tax to be subject to an audit every year; and a one-time tax penalty for those who have more than $ 50 million and try to renounce their U.S.

Warren's wealth tax proposal reflects the Democratic Party's leftward drift on economic policy and tax issues. Democratic politicians have traditionally shied away from proposing how they would raise revenue, for fear of being branded "tax and spend" liberals, said Jim Manley, who served as aides to former Senate Majority Leader Harry M. Reid (D-Nev.)

Saez and Zucman earlier this week published an op-ed in the New York Times about Rep. Alexandria's Ocasio-Cortez's (DN.Y.) proposal to raise marginal tax rates to 70 percent on revenues above $ 10 million, and plan the economists said would help combat an "inequality crisis" like climate change

"It's a pretty dramatic change that shows how much the party has evolved, "Manley said. "

Republicans are likely to seize on the plan as another example of Democrats looking to tax Americans' hard-earned gains, even though it would apply only to a tiny percentage of the population. In their major tax overhaul passed in December 2017, the Republicans significantly hiked the threshold for federal estate tax – exempting estates with assets of $ 11.4 million (in 2019) or less than paying it. They have often referred to this provision, which affects several families a year, as the "death tax."

Saez said the proposal came together quickly over the last two weeks, while adding economists have spent years considering how

Saez and Zucman initially evaluated a proposal at Warren's request to levy a 1 percent wealth tax on income above $ 10 million instead of a 2 percent wealth tax over $ 50 million, according to a Jan. 14 letter the economists sent to Warren.

In recent decades, taxation of wealth has fallen out of favor in the world's wealthiest

According to people familiar with the matter, Warren's team has considered several different proposals with various rates. countries. In 1990, 12 countries of the Organization for Economic Co-operation and Development imposed some form of wealth tax.

By 2017, that number had fallen to just four: France, Norway, Spain and Switzerland. This decline has been mirrored by a decline in the taxation of high incomes, as well as an increase in inequality, according to the OECD

The OECD report concludes that the merits of a wealth tax depend partly on how a country taxes capital gains – the income accrued from capital – and estates. Overall, it recommends that "tax exemptions should be high to ensure that the net wealth tax is levied on the very wealthy," and that "tax rates should be low and take into account tax rates on capital income to avoid imposing excessively high tax burdens on capital so as to prevent capital flight. "

Estimates of how much money can be raised by taxing the very rich vary dramatically, the Institute for Taxation and Economic Policy, a left-leaning think tank, published a report on Wednesday finds that a 1 percent wealth tax on the wealthiest 0.1 percent of Americans would raise $ 1.3 trillion over a decade, which would affect US households with wealth over $ 32.2 million.

But the conservatives have warned that high taxes on the very rich will stifle The right-leaning Tax Foundation found that Ocasio-Cortez's plan for a 70 percent tax rate would be either only raise $ 189 billion in revenue over 10 years, or lose the federal government $ 63.5 billion.

The Tax Foundation has also warned against wealth taxes, arguing that "capital accumulation is an essential ingredient for economic growth," that wealth inequality does not harm


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