Elizabeth Warren's wealth tax won't hurt economic growth

[crazytown]

Elizabeth Warren's wealth tax won't hurt economic growth

(snip -The New York Times reported that the first independent analysis of Warren's tax found it would slow investment) The fact is, the analysis cited by the Times is riddled with problems, from its practical assumptions to the entire economic theory behind the model.

(snip) First, the analysis assumes Warren will use the revenue from her tax to pay down the deficit. But Warren has explicitly said she wants that tax to offset new spending on things like student debt cancelation and a universal child care system. Those sorts of broad-based programs are going to put more money into everyday people's pockets. And those people will be more likely to spend that extra money into the economy than a small number of very rich people are likely to spend less because we taxed them — being rich, you have to cut into a lot more of their wealth before you seriously affect their spending habits.

Another recent modeling run from the Levy Institute looked at what would happen if Warren's wealth tax was combined with new government spending equal to the tax's revenue. (Like, you know, Warren actually wants to do.) "A 1 percent of GDP increase in tax revenues from the richest households, paired with an equivalent increase in public spending, generates a 1.7 percent increase in GDP," Levy found. In other words, economic growth picks up.

https://theweek.com/articles/878431/elizabeth-warrens-wealth-tax-wont-hurt-economic-growth

Assuming Warren will use the revenue from her tax to pay down the deficit when she has explicitly said the monies will be spent, is dishonesty bordering on pedagogic fraud.

[Unclephil]

1. I think this is true

Economic growth comes from the middle class.

[JoeOtterbein]

2. K n R

Thanks for posting!

[crazytown]

3. When taxes are used to fund spending

the standard economic model says this will add to economic growth because the monies will be 100% spent in the hands of the government, and less so by those being taxed - the higher the income, the lower the proportion that would be spent, the greater the stimulus.

Conversely cax cuts will harm growth if they are matched by cuts in spending. Cutting taxes for the rich and spending for the poor will hit GDP the hardest. Difficult decisions at the Pentagon

[Gothmog]

5. "Warren Wealth Tax Could Slow Economy, Early Analysis Finds" via @nytimes

Link to tweet

[crazytown]

7. This Aricle is a critique of Wharton's analysis.

[Gothmog]

8. Even though trump graduated from Wharton, I tend to trust their analysis

[Gothmog]

4. A preliminary dynamic analysis of the Warren wealth tax from Penn Wharton finds it would reduce GDP

Link to tweet

[crazytown]

6. if the funds were uses to retire debt

Warren is quite clear she will spend it.

[The Mouth]

9. My objection is that it will soon be applied to the 'middle class' as well

Much as the income tax was first promoted as only being applied to the very wealthy, which it initially was- for the first few years.

Hell, if one's main residence is included, then anyone who owns a house in California or New York could justifiably expect to find themselves taxed even more once the lower limit starts ratcheting down.

Sure, if it only applies to people worth 500 million, but you know it will apply to people worth 500 thousand in a few years.