Richest would have lost half their wealth under Warren’s tax plan

BLOOMBERG:

Billionaires such as Jeff Bezos, Bill Gates and Warren Buffett could have collectively lost hundreds of billions of dollars in net worth over decades if presidential candidate Elizabeth Warren’s wealth tax plan had been in effect — and they had done nothing to avoid it.

That’s according to calculations in a new paper by two French economists, who helped her devise the proposed tax on the wealthiest Americans.

The top 15 richest Americans would have seen their net worth decline by more than half to $433.9 billion had Warren’s plan been in place since 1982, according to the paper by University of California, Berkeley professors Emmanuel Saez and Gabriel Zucman.

Despite relying on some hypothetical assumptions, the calculations highlight what could be a key question in Thursday’s debate among Democratic Party presidential contenders: What should the U.S. do to address yawning income and wealth inequality?

The authors’ figures don’t take into account any steps billionaires might have taken to reduce their exposure to the tax, including saving less or giving more money away. Instead, the paper assumes that rich Americans effectively do the opposite: they reduce, rather than increase, charitable giving and consumption, in proportion to the wealth lost through the tax.

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