Elizabeth Warren Loves Thomas Piketty, But Dodges On His Wealth Tax

Elizabeth Warren Dodges On Wealth Tax

WASHINGTON -- Elizabeth Warren isn't all the way on the Piketty line.

The Democratic Massachusetts senator has nothing but good things to say about economist Thomas Piketty's new, massive trove of data, Capital in the Twenty-First Century, but that doesn't mean she's ready to embrace two of his key recommendations to put the brakes on spiraling income inequality -- a wealth tax and a cranked-up inheritance tax.

Piketty's book crunches through more than 100 years of economic data and finds that the value of amassed wealth tends to outpace the value of doing work -- with unfortunate consequences -- unless something intervenes.

The interventions can come from disasters like the Great Depression and war, or from government. Piketty thinks progressive taxation, larger inheritance taxes and a tax on overall wealth would do the trick, and give labor earnings a chance to keep pace with returns from the treasure hordes of the super rich.

But asked by The Huffington Post if she, as a U.S. senator, would back a wealth tax or larger inheritance tax, Warren dodged.

"I want to put it this way: We need to take a hard look overall at our approach to taxation," Warren said. "That includes every part of it -- [the tax code] has become so riddled with loopholes and exceptions that were lobbied in by powerful corporations and individuals with buckets of money. You don't want to start with any one part of it, because that isn't the point. The point is the whole thing has to be on the table at once."

Warren didn't specifically cite politics in her response, but the reality is that opponents have scaled back taxing inheritance, calling it a death tax, and new taxes of any kind don't fare well in Congress. Warren's answer also follows from the approach Warren has tended to take in the past, such as pushing for the Consumer Financial Protection Bureau, with its broad power over all consumer lending, rather than adding diffuse bits and pieces of that responsibility to existing agencies.

Warren put her tax stance in the context of what she believes the nation needs to do with its revenue, including investing more in education, student loans and infrastructure, among many other things that she said are desired by both sides of the political aisle.

"Here's the interesting point, because I really think this is the heart of the point," Warren said. "It's not that anybody on the Republican side stands up and says 'I'm opposed to education -- [at least] there are not many who would say it that way -- 'I'm opposed to education,' or 'I don't want to invest in medical research.'

"It's that they say 'There's no money.' But why is there no money?" Warren said. "Why is there always money to protect loopholes for giant corporations? Why is there money to subsidize the oil industry that made tens of billions of dollars in profits last year? Why is there money for those who already have money and power, but not money to build a future a for ourselves and our kids?"

Warren added that all those things need to be considered together.

"It's about how these pieces are linked to each other," Warren said. "We've had a tax conversation for too long that just focuses on one piece at a time. But the real question is overall -- our spending should align with our values. And that's true whether we're talking about spending through tax loopholes or spending by investing in education and infrastructure."

Warren may get her wish for a tax overhaul after this year's midterm elections, with many lawmakers on both sides of the aisle angling for such a move.

In that debate, Warren thinks Piketty's tome can make some important arguments about easing income inequality, and why Congress has the ability to intervene.

"The point Piketty makes that I think is a powerful point is that it's not a law of nature. It's not like gravity, always there," Warren said. "It's a consequence of the policy the government follows. More progressive taxation can help level the playing field. More investment in giving every kid a chance to build something helps to level the playing field."

While Warren declined to sign onto Piketty's proposed wealth tax, she was effusive about his book, which has spent much of the past week at the top of the Amazon best-seller list with her own memoir, A Fighting Chance. She said they are coming at the same problem from different angles.

"I bought it, I read it maybe two weeks ago, and I would just turn the pages and think 'Yes, yes,' as I was reading," Warren said with a laugh. "I'd say, 'Oh I didn't know that piece of data, I didn't know that historic example.' But that's what it is. He's saying in effect the same thing -- the game is rigged."

Michael McAuliff covers Congress and politics for The Huffington Post. Talk to him on Facebook.

Watch HuffPost's interview with Piketty below.

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