Tax evading billionaires will put Warren in the White House

October 10, 2019 - 11:25am

Well, it’s finally happened – America now has a regressive tax system in which the 400 richest families pay a lower effective rate than the poorest 50% of Americans.

That’s according to Christopher Ingraham in the Washington Post, who reports on the latest research into what different income groups actually pay in terms of all taxes, not just income tax :

The Triumph of Injustice, by economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley, presents a first-of-its-kind analysis of Americans’ effective tax rates since the 1960s. It finds that in 2018 the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households.

- Christopher Ingraham

The following graph shows that the super-rich used to pay a lot more but that the gap has now not only disappeared but gone negative for the first time:

Presidential contender Elizabeth Warren has a plan to put that right. This is her “Ultra Millionaire Tax“, which happens to quote the economists who produced the above research:

It applies only to households with a net worth of $50 million or more— roughly the wealthiest 75,000 households, or the top 0.1%. Households would pay an annual 2% tax on every dollar of net worth above $50 million and a 3% tax on every dollar of net worth above $1 billion. Because wealth is so concentrated, Saez and Zucman project that this small tax on roughly 75,000 households will bring in $2.75 trillion in revenue over a ten-year period.

- Elizabeth Warren

This week also brings news that Warren has moved into poll position in the race for the Democratic nomination. Donald Trump who used to call her “fake Pocahontas” has upgraded his insults, now describing her as “Uber Left.”

I’m not sure this will work for him. The idea that super millionaires should pay a higher rate tax than working class and middle class Americans, will strike most voters as fair not Leftwing.

Unlike her rival Bernie Sanders Warren is not a socialist. Indeed, she’s described herself as a “capitalist to my bones.” she does, however, want to save capitalism from its worst excesses and thus America’s wealthy elites may see her super millionaire Tax as a good deal.

Whether any of the 400 richest families are donors to the Warren campaign, I don’t know. But even if none of them are, their ability to pay so little tax is propelling her to the Democratic nomination – and perhaps all the way.

Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.

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Tax evading billionaires will put Warren in the White House

By Peter Franklin

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