Elizabeth Warren Still Wants a Wealth Tax. It Still Won’t Work.
One way to think about Sen. Elizabeth Warren’s (D–Mass.) renewed push for a wealth tax is as an opportunistic attempt to ride the pandemic policy wave: Democrats have packed hundreds of billions of dollars worth of non-pandemic policy into their pandemic relief bill, and Warren has decided that the coronavirus presents the perfect opportunity to push a signature policy that she favored long before COVID-19 was on anyone’s radar.
Warren is spending this week talking up her “Ultra-Millionaire Tax Act.” It’s essentially a refreshed version of the same idea she proposed during her failed bid for the Democratic presidential nomination. The current measure, like the old one, would tax the net worth of American households with more than $50 million in assets to the tune of 2 percent annually, with an additional 1 percent tax for households worth more than $1 billion. Warren favored the wealth tax in 2019 when the economy was generally doing pretty well. But now, she says, it’s needed “because of the changes in this country under the pandemic.”
Another way to understand her latest push is as an effort to pressure the Biden administration to move further to the left on economic policy, in part because such efforts have been relatively successful.
Warren’s insistence on a wealth tax was one of the ideas that set her apart from Joe Biden during the Democratic primaries. He wasn’t against increasing taxes on the wealthy, but he never backed taxing the wealthy that particular way. The wealth tax—a version of which Sen. Bernie Sanders (I–Vt.) also supported—was a radical idea. Biden was running as the Democratic primary field’s moderate.
Yet as the Democratic party’s nominee, and then as president, Biden has moved toward the left, especially on economic policy. He’s a centrist only in the sense that he’s found the middle of the Democratic party, trying to split the difference between its more moderate factions and progressive agitators like Warren. Biden’s steady movement suggests that the pressure from the left is having an impact.
When asked recently about Warren’s wealth tax proposal, Biden administration press secretary Jen Psaki walked a careful line: Biden “strongly believes that the ultra-wealthy and corporations need to finally start paying their fair share,” she said, according to CNN. “He’s laid out a lot of ideas and when we get to that point in our agenda, he’ll look forward to working with [Warren] and others in Congress.” Biden isn’t committing to th
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