Senator Elizabeth Warren is proposing that an establishment
of a “2% tax on net worth between $50 million and $1 billion, and a 3% tax
above $1 billion” the revenue from which she would direct to help with wealth
inequality. She explains that this tax could help increase revenue, estimated
at $2.75trillion, which in turn could help, as she would direct it, give more equal
opportunity for everyone else in America. She asserts that this extra money
could help decrease the costs of healthcare and help with student loans.
This new wealth tax would help address the fact that many
people with high net worth are able to avoid paying high amounts of tax by
using loopholes. Given US income inequality, not everyone is given the same
opportunities. Those who don’t have high incomes or high net worth might not be
able to afford to get a college education leading to more uneducated people
affecting productivity in our economy. Middle-income families are already taxed
on their wealth because it comes out as property taxes they have to pay for
their homes, where the rich have a smaller percent of financial assets in real
estate subject to property taxes. Senator Warren’s new proposed wealth tax
would make sure that both the high- and middle-income families would be treated
more equally. However, they stated that other countries have tried to create a
tax that will help with wealth inequality but found that it was hard to administer
so the countries did not get the expected revenue.
This wealth tax could be used to redistribute more money
from the rich to the poor. More financial resources provided to the poor could
help with more equal opportunities as well as a more educated workers and
better community connections leading to more economic growth. However, this
wealth tax is new, and it will be interesting to see if it works and if others
will agree and support this wealth tax.
2 comments:
I would be curious to see how the tax revenue would be spent on programs aimed at inequality. While the article does mention programs such as student loan relief I would be interested in learning more about the specifics of the proposal. It would also be interesting to look at how Warren could improve equity through healthcare with the revenues projected as many have predicted that healthcare overhauls similar to Warren's plans would be much more expensive than the $2.75 trillion that the tax is expected to create.I also wish the article noted how individuals would otherwise allocate this money when it is not being taxed. Outside of my questions I think the article brings up some unique points about the plan. A plan that I think will be similar to other challengers in the 2020 Presidential election.
I think the notion the "loopholes" that the exorbitantly wealthy have via several tax deductions/preferential rates for capital gains can be closed by a wealth tax is both interesting and arguably plausible. More specifically on the student debt relief aspect, it could be used as a proactive measure to prevent economic turmoil, as Millennials and Gen Z's will not be able to pay back their student debt in full and survive concurrently. As a reactive measure, it would be interesting to see if/how the rerouted funds could be used to prop up the economy if a crisis were to occur.
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