Elizabeth Ocasio-Warren: Let's use a "wealth tax" to take a few trillion from the very rich

I liked her better when she was only stealing Instagram gimmicks from AOC.

Okay, fine, my headline is unfair. Warren was pushing soft socialism back when Ocasio-Cortez was still in diapers. Why should the latter rather than the former be credited for an idea like this? A Twitter pal reminds me that last year Warren went as far as to push a plan to remake corporate governance in America, requiring companies by law to consider not just the interests of their owners — shareholders — in conducting business but also those of labor and the surrounding communities. If anything, AOC should probably be referred to as Alexandria Warren-Cortez.


Really, though, no Democrat be credited with some sort of policy innovation for a “soak the rich” proposal. This is rudimentary leftism, perfectly salable to a Democratic primary audience and maybe beyond in 2019. The bad news: The long march from taxing the ultra-rich to the very rich to the rich to the middle class has begun. The good news: If Warren’s plan is enacted, which it won’t be, we’ll be able to pay for not quite a tenth of “Medicare for all.”

Emmanuel Saez and Gabriel Zucman, two left-leaning economists at the University of California, Berkeley, have been advising Warren on a proposal to levy a 2 percent wealth tax on Americans with assets above $50 million, as well as a 3 percent wealth tax on those who have more than $1 billion, according to Saez.

The wealth tax would raise $2.75 trillion over a ten-year period from about 75,000 families, or less than 0.1 percent of U.S. households, Saez said…

Warren’s proposal includes at least three new mechanisms to combat tax evasion, according to a person familiar with the plan. Those are a significant increase in funding for the Internal Revenue Service; a mandatory audit rate requiring a certain number of people who pay the wealth tax to be subject to an audit every year; and a one-time tax penalty for those who have more than $50 million and try to renounce their U.S. citizenship.

Checkmate, high-paid tax lawyers. You’ll never find a way, or two ways, or several dozen, to keep that cash out of the IRS’s clutches now.


I think this is a clever bit of positioning by Warren inasmuch as it’s a type of triangulation dressed up as dogmatic leftism. Triangulation with the right in this case is easy. Soaking the rich is broadly popular with Americans; Trump’s biggest legislative achievement to date was a tax cut that benefited the rich; thus, if she’s the nominee, Warren will use this proposal to club Trump during the campaign for being a phony populist who’s more concerned with protecting his gold-plated toilet than he is the working-class voters who elected him. One of his great magic tricks in 2016 was turning his wealth into a political asset despite the fact that he was pitching to a populist audience. Few people in America showed off their dough over the years in ways as vulgar as he did, but it worked for him electorally. Reminding voters repeatedly of his success made them think he’d be a success in office too, with some of his wealth-creating talent destined to transfer to them. Such is the Trump myth. Warren will try to use her wealth tax to puncture it and bring some of those working-class Trump voters into her camp.

Triangulation with the left is more subtle. It’s true that Ocasio-Cortez has been in the news lately for wanting to tax the rich but the income threshold AOC identified was much lower than Warren’s and the rate she prefers is much higher. Ocasio-Cortez’s plan was to slap a 70 percent marginal rate on income over $10 million. By “income” I assume she means all earnings, including capital gains; it’d be odd for a socialist to exempt broad categories of wealth in a revenue grab from the ultra-rich. If so, then AOC’s proposal would be much more aggressive than Warren’s two-percent confiscation of wealth above $50 million. And that’s also useful to Warren in a general election, as she’s understandably keen for voters not to view her as a Bernie-style policy radical. She’s gone as far as to try to distinguish herself from him by embracing the term “capitalist,” a word not in favor among the Democratic base, knowing that Republicans will hammer her relentlessly for being a wild-eyed leftist if she’s the nominee. “This is a very modest proposal,” she’ll say of her wealth tax when called on it. “There are people in my party, like Bernie Sanders and Alexandria Ocasio-Cortez, who support much more ambitious taxation of the rich than I do.” Thus does the wealth tax become a “moderate,” middle-ground policy.


Don’t believe me? Vox-er Dylan Matthews is tracking the proposal’s reception:


Yeah, that’s the only real risk to Warren here. She’s pandering to the left, but her “modest” confiscation will certainly be topped by more desperate primary candidates.

I’m curious to see how Trump reacts over the next year as more Dems push plans like this. I’m curious too to see what Fox News does with it. Hannity recently went after Ocasio-Cortez for her tax plan but I’d bet good money that the more true-blue populists in the Fox News line-up like Tucker Carlson see some promise in class warfare against the rich. I wonder how many years it’ll be before Sean is also open to a bit of rich-soaking.

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