A Second Opinion: How about a Wealth Tax? It could slow economic growth, says study

Warren: “When you make it big, pitch in two cents so everybody gets a chance to make it.”

by Mary Foran

Presidential hopeful Senator Elizabeth Warren has proposed a “Wealth Tax” on high-income US citizens which an independent analysis has shown will reduce economic growth by 0.2 percentage points over the course of a decade.

Other Democrats have agreed with Warren on her plan to raise revenue for her ambitious plans for increased child care, education funding and student loan forgiveness as well as universal health care.

Warren campaigning for universal health care within a comprehensive social program

Senator Warren’s Wealth Tax would impose and annual bite of 2 percent on assets held by Americans, including stocks and real estate, that total more than $50 million. It would add an additional 1 percent tax on assets of more than $1 billion. Senator Warren says that her plan would raise nearly $3 trillion over a decade, but much of that would be spent on her programs rather than lowering the national deficit which is reaching $20 trillion.

As quoted in a New York Times article, Warren said, “I’ve heard that there are some billionaires that don’t support this plan…All we are saying is when you make it big, pitch in two cents so everybody gets a chance to make it.”

According to the analysis, “if the government collects $3 trillion in wealth tax revenue, and spends $3 trillion on public infrastructure, it’s unclear that there should be a reduction in the amount of overall investment in the economy.”

Trump reelection campaign

President Donald Trump is well-known for his tax cuts for the middle-class and wealthier citizens, which have given him a popular base of support in spite of the impeachment inquiry hearings which are now taking place in the House of Representatives. His “trickle-down” economic theory on the economy, which is considered at an all-time high, is the opposite of the Warren Democrats’ position, which see the wealthy as not paying their fair share of taxes to mitigate the many social problems facing Americans, such as homelessness and health care reforms.

Corporations and individually wealthy citizens are skeptical about Warren’s plans, but the average hard-working Joe sees it as a call for economic justice from the upper 1 percent.

A tax on wealth might have a cooling effect on the US economy, but the money for social programs has to come from somewhere, and if we can avoid an outright recession, I would go for a “Wealth Tax” since, of course, I am not one of the Wealthy it would affect! One always passes the buck onto the other guy!

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Featured image (Money)/Pictures of Money, CC BY2.0
Sen. Warren and Pres. Trump on the presidential campaign trail/their social media