Bernie Sanders’ tax plan would impose annual tax rates of well over 100% on the richest 400 Americans, according to his economic advisers, mostly through his new wealth tax.

The idea that the federal government should take more from the very wealthy than they earn in a year is a policy innovation, one the Democratic candidate has advanced as part of a sweeping anti-inequality platform. Critics, however, argue that it's unrealistic and would harm the economy by reversing billionaires' incentives to innovate and invest.

Emmanuel Saez and Gabriel Zucman, the Berkeley economists who've advised Sanders on his wealth tax plan and the authors of a new book on inequality, calculate on their website that Sanders' tax proposals would result in a 97.5% tax rate for the richest 400 Americans, who have pre-tax incomes above $456.5 million — and that rate would rise above 100%, depending on how the specifics of Sanders' plan were spelled out. Today, in contrast, the tax rate for the same group is 23.1%, they estimate.

The proposal has elicited criticism from analysts on the basis that high tax rates discourage people from working or investing, and thereby slow economic growth, and ultra-high tax rates would amplify those effects.

"What’s the incentive to grow your own company if your wealth is decreasing every year?” asked Marc Goldwein, the senior policy director for the Committee for a Responsible Federal Budget, a group that advocates for deficit reduction.

And tax rates near or above 100% wouldn't just reduce the incentive to invest and build wealth ⁠— they could incentivize wealth destruction or rampant tax evasion.

“The idea that someone like Jeff Bezos is going to pay 97% or more of their income in taxes is on its face ridiculous,” said Ben Ritz, an economist at the Progressive Policy Institute, a left-of-center think tank.

At the same time, though, it's not so clear that Sanders' proposals would create the same ill effects that income tax rates above 97% would, because the novel wealth tax would create much different incentives. In fact, comparing the tax burden imposed by the income plus wealth taxes in Sanders' plan to typical average tax rates based solely on income taxes would be an apples-to-oranges comparison, Goldwein noted.

For example, if an individual had $20 billion of total wealth in properties, stocks, and investments and an income of $500 million in salary, business profits and capital gains, then his tax bill would be dominated by the wealth tax: He would owe approximately $1.45 billion, a little over 7% of his total wealth ⁠— much more than his income.

And that tax is imposed regardless of how much or how little a person earns in a year.

So while a person's effective tax rate, calculated as total tax paid divided by their income, might be well over 100%, that does not mean that the person faces a similarly high marginal tax rate, meaning the tax incurred on each additional dollar of income.

“A billionaire starts with a huge tax liability and needs a large income to be able to offset that initial liability, but the initial liability does not work as a marginal tax,” Saez told the Washington Examiner.

Saez, an expert on inequality, argued that the wealth tax, unlike marginal tax rates, wouldn't in theory discourage people from working to become wealthy.

“Would a billionaire tax reduces the incentives of a youngster to start a new business? That seems unlikely to us,” he said via an email.

Sanders' wealth tax plan would raise $4.35 trillion over 10 years, Saez and Zucman estimated, to pay for programs such as "Medicare for all" and universal child care, by taxing household wealth over $32 million at a 1% rate, rising to 8% for couples with over $10 billion.

Beyond raising money for social programs, however, the wealth tax would also create an inducement not to pursue or maintain billion-dollar fortunes. That incentive is in line with Sanders' statement that “billionaires shouldn’t exist.”

“It's not ridiculous in that it is accomplishing its goal, which is to end multi-billionaires," said Goldwein. "This will, in theory, accomplish it.”

Of course, Sanders also does favor much higher income tax rates. Saez estimated that while the marginal income tax rates under the Sanders plan wouldn't be 100%, they would be around 60% to 70%, much higher than the top marginal rate of 37% set by the 2017 Trump tax cuts.

“High-marginal tax rates on incomes and salaries were normal when we had rates well above 70%. Those are also common in other countries,” said Mike Konczal, a fellow who specializes in economic policy at the Roosevelt Institute, a progressive think tank. “Other countries have rates at this level and they do very well as well.”

Konczal argued that the high income tax rates and the wealth tax would work together to prevent the accumulation of wealth by the top 1% of income earners. For example, he said, corporate boards would be less likely to give high-level CEOs massive salaries if the government would simply tax that wealth away once it was accrued.

Sanders' critics, at least, give him credit for ideological consistency and honesty in acknowledging the level of taxation that would be necessary to finance the programs he favors. He has straightforwardly said, for example, that middle-class taxes would rise to implement "Medicare for all" (which he argues would leave the middle class better off overall).

“I think to Bernie’s credit, he wants to show that he can pay for things, for all of his faults, unlike a lot of other left wingers," Ritz said. "He says if you want more government spending, you have to pay more for it — not just the rich, but everybody."

Joseph Simonson contributed to this report.