Democratic presidential candidate Sen. Elizabeth Warren (D-MA) has released her tax plan that an analysis has found would result in a tax rate of over 100% for some billionaires and millionaires.
The Wall Street Journal reports:
Potential tax rates over 100% could result from the combination of tax increases the Massachusetts senator proposes for the very top tier of investors. She wants to return the top income-tax rate to 39.6% from 37%, impose a new 14.8% tax for Social Security, add an annual tax of up to 6% on accumulated wealth and require rich investors to pay capital-gains taxes at the same rates as other income even if they don’t sell their assets.
Consider a billionaire with a $1,000 investment who earns a 6% return, or $60, received as a capital gain, dividend or interest. If all of Ms. Warren’s taxes are implemented, he could owe 58.2% of that, or $35 in federal tax. Plus, his entire investment would incur a 6% wealth tax, i.e., at least $60. The result: taxes as high as $95 on income of $60 for a combined tax rate of 158%.
Warren’s economic plan was recently harshly criticized by former Obama administration adviser Steven Rattner, who said, “I would say it’d be disastrous for the American economy.”
“The fundamental different view she has of what capitalism is – she says she’s a capitalist, but she’s not a capitalist,” Rattner said, adding that Warren is essentially a socialist who “wants to fundamentally change the role of an American company, how an American company is governed, what it’s supposed to do, in ways that I think at least would be disastrous for the American economy.”
Rattner concluded, “I think you could make an argument that her plans and policies are far more extreme than Bernie Sanders’ in terms of its impact on the American economy and the fundamental way in which we do our business here.”
The Wall Street Journal noted that a tax rate of over 100% “would be typical, especially for billionaires,” and is what Warren is banking on to pay for her massive government programs which include “health care, child care, housing and education programs.”
“Ms. Warren has talked most about her plan, announced in January, to impose a 2% annual tax on wealth above $50 million and 3% above $1 billion, which she doubled to 6% this month to pay for Medicare for All,” The Journal added. “Economists generally think taxes on profits, capital gains and dividends discourage investment and hurt economic growth.”
Warren’s proposals are extreme and would likely devastate the American economy.
In September, Warren endorsed a carbon tax without hesitation during a town hall event on CNN:
CNN’s Chris Cuomo: “Yes to a carbon tax?”
Carbon taxes would be disastrous for the American economy as Heritage Foundation Labor Markets and Trade expert David Kreutzer noted in 2014 when analyzing a carbon tax bill that was proposed by Sen. Bernie Sanders (I-VT) and then-Sen. Barbara Boxer (D-CA).
“The tax started at $20 per metric ton and would rise by 5.6 percent per year, reaching $50 per metric ton by 2030 (the endpoint for the Heritage analysis),” Kreutzer wrote. “Using the Heritage Energy Model (HEM), a derivative of the Energy Information Administration’s National Energy Modeling System (NEMS), Heritage projected what the economic impacts would have been had the bill become law.”
The impacts of the propose carbon tax included:
GDP loss of $146 billion in 2030
A family of four losing more than $1,000 of income per year
Over 400,000 lost jobs by 2016
Coal production dropping by 60 percent and coal employment dropping by more than 40 percent by 2030
Gasoline prices rising $0.20 by 2016 and $0.30 before 2030
Electricity prices rising 20 percent by 2017 and more than 30 percent by 2030.
In July, CNN business reporter Cristina Alesci reported that Warren’s plans could actually trigger serious economic problems in the United States.
Warren is “proposing some solutions that actually might create another crisis,” Alesci said. “Warren is shaping this conversation in a way that is politically convenient for her. As far as her policy proposals, she is recommending lowering rents, offering affordable childcare, offering free tuition at colleges, all of that costs money, and the American public should be asking, ‘how do you pay for it?’”
“One way would be to increase taxes, another way is to increase government debt,” Alesci continued. “This is the issue that the American people should be actually focused on because many experts say if we don’t get control of our debt over the next 10 years, we could be facing a fiscal crisis.”