Wealth Tax

Representative Alexandria Ocasio-Cortez recently brought up the idea of a higher marginal income tax rate and now Senator Elizabeth Warren proposes a new annual tax.

Warren, who hopes to secure the Democratic nomination for president, announced Thursday that she would levy a 2 percent tax on assets over $50 million and a 3 percent tax on assets over $1 billion.

Nomi Prins notes that property taxes are also wealth taxes and quite regressive since the rich have a much smaller proportion of their wealth in real estate as opposed to a middle class homeowner.

Sophia Tesfaye adds that the richest 1 percent of families currently pay 3.2 percent of their wealth in total taxes on average while the bottom 99 percent pay 7.2 percent relative to their wealth.

Update (August 14):  Rick Baum discusses the wealth tax using Federal Reserve Board data.

[D]uring the previous ten years, the total wealth of the top 1% increased from $14.08 trillion to $31.91 trillion, or by over $17 trillion. If the growth in their wealth continues to rise at this rate, Warren’s tax would come to less than 16% of the increase in their wealth, not touching their current wealth.