An ultra-millionaire tax” — or wealth tax — proposed by Democratic presidential candidate Elizabeth Warren is likely to raise between $2.3 trillion and $2.7 trillion in additional revenue in ten years from 2021 to 2030, according to a study by the Penn Wharton Budget Model, a nonpartisan research initiative that analyzes the fiscal impact of public policy programs. These revenue projections are significantly lower than Warren’s estimate that the plan can potentially generate $3.75 trillion. Moreover, the wealth tax may depress GDP in 2050 by 1% to 2%, depending on how the money is spent and the productivity boost it generates, the study adds.
Warren last month announced a revision of her earlier wealth tax proposal of January 2019, doubling the levy on households with more than a billion dollars in net worth. Under her plan, households would pay an annual 2% tax on every dollar of net worth exceeding $50 million and a 6% tax on net worth more than $1 billion. The tax would impact some 75,000 households who comprise the top 0.1% of U.S. households, according to analysis by economists Emmanuel Saez and Gabriel Zucman of the University of California-Berkeley.
“A small group of families has taken a massive amount of the wealth American workers have produced, while America’s middle class has been hollowed out,” Warren said in the introduction to her latest plan. “It’s time for the rich to pay their fair share.” She cited findings by Saez and Zucman that the 400 richest Americans now own more wealth than all Black households and a quarter of Latino households combined.