The wealth tax proposal from White House hopeful Sen. Elizabeth Warren Elizabeth WarrenOvernight Defense: Appeals court revives House lawsuit against military funding for border wall | Dems push for limits on transferring military gear to police | Lawmakers ask for IG probe into Pentagon's use of COVID-19 funds On The Money: Half of states deplete funds for Trump's 0 unemployment expansion | EU appealing ruling in Apple tax case | House Democrats include more aid for airlines in coronavirus package Warren, Khanna request IG investigation into Pentagon's use of coronavirus funds MORE (D-Mass.) is unlikely to raise as much revenue as the Massachusetts senator’s campaign claims it would, according to projections from the Penn Wharton Budget Model (PWBM) released Thursday.

Warren has proposed a tax of 2 percent on net worth between $50 million and $1 billion, and a tax of 6 percent on net worth above $1 billion. The campaign is projecting that the tax would raise $3.75 trillion in federal revenue over a decade, based on estimates from University of California-Berkeley economists Emmanuel Saez and Gabriel Zucman.

PWBM, however, said that its “best estimate” is that Warren’s proposed wealth tax would raise about $2.7 trillion over 10 years without accounting for macroeconomic effects.

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Richard Prisinzano, director of policy analysis for PWBM, said that his group used a different basic data set from the Warren campaign and that his group has “some stronger behavior" built into its estimate.

In their report, the researchers with PWBM said that their $2.7 trillion revenue projection “includes the effect of forgone revenues due to tax avoidance, which includes both legal responses by taxpayers to reduce their tax exposure as well as illegal evasion.”

PWBM estimated that if there were no tax avoidance, Warren’s wealth tax would raise $4.8 trillion over 10 years, while if there was “extreme” tax avoidance, the tax would only raise $1.4 trillion.

Warren has proposed several ways to prevent wealthy people from avoiding her tax, including an increase in the IRS enforcement budget, a minimum audit rate for people subject to the tax, and an exit tax for people who renounce their U.S. citizenship. PWBM didn't look at Warren's specific anti-enforcement measures, saying that "without specific legislative language ... we cannot evaluate the efficacy of potential Treasury regulations related to enforcement."

PWBM estimates that after accounting for macroeconomic effects, Warren’s wealth tax would raise $2.3 trillion, less than the amount that the tax is estimated to raise under the group’s conventional analysis.

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“Because the wealth tax takes away some of the base that forms the wealth, the economy shrinks, revenues go down even further,” Prisinzano said.

Warren has said that she plans to use the revenue raised from her wealth tax to help pay for her “Medicare for All” health plan and for several education-related priorities.

Her campaign criticized PWBM's analysis, saying it didn't factor in the candidate's anti-tax evasion measures and the specific spending programs she plans to pay for with her wealth tax.

"Economists and experts who have analyzed Elizabeth’s actual plans have found that her wealth tax will generate $3.75 trillion in revenue and that her middle-class investments will produce significant economic growth," said Warren campaign spokeswoman Saloni Sharma. "This analysis does not study Elizabeth’s actual plans -- it does not account for the strong anti-evasion measures in her wealth tax and does not even attempt to analyze the specific investments Elizabeth is committed to making with the wealth tax revenue. This is an analysis of a different and worse plan than Elizabeth’s, using unsupportable assumptions about how the economy works, and its conclusions are meaningless."

PWBM looked at the effects on gross domestic product (GDP) and wages of the proposed wealth tax if the revenue is used for deficit reduction, financing nonproductive spending and financing new productive spending.

The report estimates that the wealth tax would reduce GDP in 2050 by 0.9 percent if the revenue is used for deficit reduction, 2.1 percent if the revenue is used to finance nonproductive spending and 1.1 percent if the revenue is used to finance new productive spending. The report estimates that the wealth tax would result in average hourly wages declining in 2050 by 0.8 percent if the revenue is used for deficit reduction, 2.3 percent if the revenue is used to finance nonproductive spending and 2.2 percent if the revenue is used to finance productive spending.

— Updated at 6:25 a.m.