Recently, Elizabeth Warren unveiled a bold plan to help close the nation’s wealth gap. Although the proposal by Warren is still in its infancy, the basic premise would be to levy an annual tax for the ultra-wealthy, based upon the value of their wealth. Households with more than $50 million of net worth would be liable for a 2% tax on that wealth. And for the super-duper-ultra-wealthy – households with a net worth of more than $1 billion – that tax would be increased to 3%.
It’s estimated that Senator Warren’s proposal would “only” impact about 0.1% of U.S. households. However, that still means the tax could hit nearly 75,000 households, a staggeringly high number of households when you consider the extreme wealth it would take to become subject to the tax in the first place. But while the Warren Wealth Tax could potentially raise nearly $3 trillion in additional tax revenue over the next decade – far more than other progressive proposals, such as the 70% top income tax rate floated by Congressional newcomer Alexandria Ocasio-Cortez – it is riddled with problems so deep that it is hard to imagine any scenario where it could become a reality.
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