After a grimace and eye roll, it was crystal clear where Sen. Elizabeth Warren (D-Mass.) was headed Thursday when she was challenged on her support for a wealth tax.
Warren is proposing an annual 2-cent tax on every dollar over $50 million of a family’s net worth. Billionaires would pay a 6% tax above $1 billion.
“There is no evidence that anyone is going to leave this country because of a 2-cent wealth tax,” an exasperated Warren responded when CNBC host Sara Eisen raised the argument. Several nations have far higher tax rates, in addition to wealth taxes, so it’s not clear where they would go.
“How about a counter-argument that’s based on fact?” the senator snapped.
“The wealthiest in this country are paying less in taxes than everyone else,” Warren said. “Asking them to step up and pay a little more, and you’re telling me that they would forfeit their American citizenship .... I’m just calling your bluff on that.”
Warren added: “Can we just keep in mind right now in America who is paying taxes?” She noted that the “bottom 99%” of Americans paid roughly 7% of their total wealth in taxes in 2020. But the top “one-tenth of 1%” paid only 3.2% of their total wealth in taxes, she added.
“If they added a 2-cent wealth tax, they’d still be paying less than most of the people in this entire nation,” Warren added.
“All I’m saying is can we have just a little fairness here?” she said. “Someone has to pay to keep this nation going. And right now what the ... wealthiest people in this country have said is, ‘Let’s let everyone else pay for it.’ Because what they want to do is not only keep their wealth, they want to keep building their wealth faster than anyone else.”
As Americans struggle to meet their mortgages and rents, keep food on the table and pay medical bills amid the economic and deadly toll of COVID-19, U.S. billionaires over the past year have become $1.1 trillion wealthier.
The rich often pay lower tax rates than wage earners because much of their income comes from investments that are taxed at a lower rate than wages. And top-margin tax rates are significantly lower now than they were from 1917 to 1986, when rates were slashed during the Reagan administration.
In addition, Donald Trump and the Republicans slashed corporate taxes 40% — from 35% to 21% — granted business-owning taxpayers a 20% deduction and doubled the ceiling on tax-free inheritances for a couple to $22 million.
About 82% of the various Trump administration tax breaks over time will benefit the wealthiest 1% of the nation. The benefits, meanwhile, are digging an estimated $1.9 trillion hole in the U.S. Treasury through 2028.
The Trump administration tax changes meant that for the first time in a century, the nation’s billionaires paid a lower effective tax rate than “steelworkers, schoolteachers and retirees,” according to an analysis by economists at the University of California, Berkeley.
Though Donald Trump has repeatedly boasted that he’s a billionaire, he paid no federal income tax in 10 of the 15 years before 2016, and he forked over just $750 a year to the Internal Revenue Service in 2016 and 2017, according to tax returns obtained by The New York Times.