Taking a cue from Thomas Piketty — and Alexandria Ocasio-Cortez, Elizabeth Warren has introduced the idea of a wealth tax to combat inequality and fund major priorities like health care, child care, and climate change.
The annual tax would target 2 percent of all assets over $50 million, and 3 percent over $1 billion. This would raise an estimated $2.75 trillion over 10 years from what Warren refers to as the “tippy top” — 0.1 percent of American families, according to an analysis by economists Emmanuel Saez and Gabriel Zucman at the University of California at Berkeley.
Warren went onto MSNBC to bat back some of the obvious questions: Won’t rich people just squirrel away their assets overseas? Well, her proposal would tax all assets wherever they are — with a heavy assist from new audit powers.
There’s apparently a question as to whether this is Constitutional. The Constitution gives Congress the power to tax; and then there’s the income tax amendment; but apparently there’s a question that a “direct tax”, ie a property tax as far as I can tell, must be proportional to population.
In any event, it’s an interesting framing issue: First is the equity issue, since the wealthy have looted our treasury to the tune of trillions — just in the latest tax cut, the last of a string of bonbons for the wealthy. This is merely a claw-back. There is no reason why we have to simply accept wild inequality as Just How Things Are.
I do think it’s also important to say that this is for tangible public benefits, as Warren says: You’re going to get something from this. As a political matter, I’d kind of prefer we lead with the upside, and then talk about how to pay for it as an afterthought. Such means exist.
And again, note the outsize influence of Alexandria Ocasio-Cortez. She is creating — or perhaps reflecting — a new space for ambitious ideas, which are after all merely an attempt to bring us back from an era of domination by the insanely wealthy. Has any other Congressperson — one of 435! — had greater influence on the public conversation, even before she took office? This 28-year-old is gladly taking the flak and enjoying the fight. MA Congresspeople, take note and speak up!