Presidential Candidate Elizabeth Warren has proposed a Wealth Tax on people making more than $50 million and an even larger tax if they make more than $1 billion.
According to Warren’s current proposition if the net worth of an American is $50 million or more the person would have to pay an annual 2% wealth tax. If the person’s net worth is $1 billion or more they would have to pay an annual 3% wealth tax.
Based on an analysis done by The Wharton School of the University of Pennsylvania:
- “The proposed wealth tax will raise between $2.3 trillion and $2.7 trillion over ten years, roughly about $1.0 to $1.4 trillion less than the Warren campaign’s estimate”.
- “The proposed wealth tax would shrink the economy between 0.9 and 2.1 percent by 2050, depending on how the additional tax revenue is spent”.
- “Average hourly wages in the economy, including wages earned by households not directly subject to the wealth tax, are projected to fall between 0.8 and 2.3 percent due to the reduction in private capital formation”.
Presidential Candidate Mike Bloomberg said, “The wealth tax just doesn’t work. It’s been tried elsewhere. We have to raise taxes on the wealthy, that’s the way you fix income inequality. And that’s where we get money to do the things that we need to do that keep this country safe and to keep the economy going. But you don’t just go and do it for the heck of it because you want to be mean. You do it because you need the money and…you’re going to spend it wisely”.
One large concern with Warren’s tax proposal is that it might not be constitutional. According to Article 1 of the Constitution Section 8 it says, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States”. And, according to Article 1 of the Constitution Section 9 it says, “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken”.