Sen. Elizabeth Warren (D-Mass.) will reportedly introduce a proposal to tax wealthy Americans who have more than $50 million in assets.
The Washington Post reports that Warren’s “wealth tax” is aimed at addressing growing income and wealth inequality in the country.
The proposal could help the progressive lawmaker stand out in the 2020 Democratic presidential field, though it is likely to receive scrutiny from her opponents.
Emmanuel Saez, a left-leaning economist advising Warren, said her plan is to impose a 2 percent tax on Americans with more than $50 million in assets and a 3 percent tax on those with more than $1 billion in assets.
{mosads}Her proposed tax could garner as much as $2.75 trillion over a 10-year period from taxing roughly 75,000 families, Saez said. That equates to less than 0.1 percent of American households, he noted.
“The Warren wealth tax is pretty big. We think it could have a significant affect on wealth concentration in the long run,” Saetz, an economist at the University of California, Berkeley, told the Post.
Warren’s proposal is different from the marginal rate of taxing 70 percent of income above $10 million dollars that was recently floated by freshman Rep. Alexandria Ocasio-Cortez (D-N.Y.), but shows how the Democratic Party is further embracing new ideas to combat the growing “inequality crisis,” as Saetz and his colleague Gabriel Zucman put it.
“This is a very interesting development with deep root causes: the fact inequality has been increasing so much, particularly in wealth, and the feeling our current tax system doesn’t do a very good job taxing the very richest people,” Saetz told the Post.
“It’s a pretty dramatic change that shows how much the party has evolved,” Jim Manley, an aide to former Senate Majority Leader Harry Reid (D-Nev.), told the newspaper. “It’s not where everyone in the party is now, but it’s an awful lot of people.”
A source told the Post that Warren’s proposal has a handful of components aimed at combating tax evasion, including a mandatory audit rate requiring the Internal Revenue Service (IRS) to audit a certain number of people who would pay a wealth tax.
Additionally, a one-time tax penalty would be imposed on those who have more than $50 million in assets and attempt to renounce their U.S. citizenship.
Warren’s campaign team did not immediately respond to a request for comment.
The two-term senator rose to prominence during her tenure as a Harvard professor and as chairwoman of the Congressional Oversight Panel while addressing the fallout on the working and middle class from the 2008 financial crisis. She has remained a vocal advocate for consumer protection.
Warren announced on New Year’s Eve that she was forming an exploratory committee to run for president.