A “wealth tax” is Massachusetts Sen. Elizabeth Warren’s best-known proposal. The Democratic presidential candidate is calling for a 2-percent tax on an individual’s assets above $50 million, rising to 3-percent on assets over $1 billion.

If such a plan had been in place since 1982, the richest Americans would have significantly smaller fortunes today, according to a draft paper by University of California at Berkeley economists Emmanuel Saez and Gabriel Zucman.

“A wealth tax such as the one proposed by Elizabeth Warren would have a large impact on progressivity within the top 0.1 percent,” they write, with the greatest impact by far landing on those in the top .01 percent. Those masters of the masters of the universe would see their tax rate increase by 14 points. (The analysis assumes these wealthiest of Americans would successfully “hide” 15 percent of their wealth.)

Bloomberg News highlighted exactly how, according to the economists’ work, Warren’s tax policy might have impacted America’s greatest fortunes if it had been applied over the past 37 years. Microsoft co-founder Bill Gates’ wealth today would be $36.4 billion instead of his actual estimated wealth of $97 billion. Investor Warren Buffett would have $29.6 billion in his piggy bank instead of $88.3 billion.

“The calculations,” Bloomberg reporters Rich Miller and Laura Davison write, “underscore how a wealth tax of just a few percentage points might erode fortunes over time and presumably reduce wealth inequality.”

Saez and Zucman, who have worked with “Capital in the 21st Century” author Thomas Piketty as well as with Warren, note that the wealthiest Americans have enjoyed highly beneficial tax policies in recent decades. “The top marginal federal income tax rate,” they write, “has fallen dramatically, from more than 70 percent between 1936 and 1980 to 37 percent since 2018.”

Warren, who calls herself a proud capitalist but insists “markets without rules are about the rich take it all,” has seen her campaign events in recent months become the largest in the Democratic presidential field. Former Vice President Joe Biden remains the front-runner in national polls, with Warren and Vermont Sen. Bernie Sanders vying for second.

-- Douglas Perry

@douglasmperry

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