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- Recent research and analysis convincingly argues that the plan would collect a fraction of the revenue that Warren’s advisers expect. Lawrence Summers, the economist and former Treasury secretary, and Penn professor Natasha Sarin argue this from the U.S.’s experience with the estate tax. And economists Matthew Smith, Owen Zidar and Eric Zwick present preliminary estimates suggesting that the Warren proposal would raise half as much as projected.
- It may be unconstitutional, and its constitutionality would surely be challenged.
- It is equivalent to an income tax of well over 100 percent, in many cases. For example, a 2% wealth tax on an asset that yields a steady 1.5% return is equivalent to a 133% income tax.
- By reducing national savings, it would either reduce investment — which would reduce productivity and wages — or increase inflows of foreign capital.
- It would not curb political influence in the way its advocates suggest.
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Author: Frances Rice
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