The Problem with Elizabeth Warren’s Wealth-Tax Plan

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Mises Institute

The Problem with Elizabeth Warren’s Wealth-Tax Plan

10/19/2019Germinal G. Van

Elizabeth Warren is among the strongest contenders and Democratic hopefuls for the presidential election of 2020. During the fourth Democratic debate, on October 15, her “Wealth Tax Plan” received close attention as to how it could reduce income inequality in the United States.

The central argument of Warren's the wealth-tax proposal is this: through a progressive wealth tax system — which means those with more wealth will pay higher tax rates — the wealthiest people in America will pay their “fair share” and that fair share will enable the equal redistribution of wealth. Set forth by French economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman; this idea for lessening the "wealth gap" is composed of three main planks:

First, households would pay an annual 2 percent tax on all assets for net worth equal or less than $50 million. Individuals and families who are worth more than a $1 billion would pay a 3 percent tax . Second, the Warren forecasts a revenue of $2.75 trillion, and that would be allocated in the creation of new government programs such as universal child care for every child age zero to five; universal pre-k for every three- and four-year-old; student-loan forgiveness; free tuition and fees for all public technical schools, two-year colleges and four-year colleges.