Elizabeth Warren’s presidential campaign is over, but she is winning the war for ideas. By Zach Carter, from our left wing friends over at the Huffington Post. Elizabeth Warren just withdrew from the race.
Her bankruptcy scholarship from the 1980s through the 2000s didn’t just resonate with those reading law reviews and economic journals. It took Washington. Chuck Schumer was stunned to read Warren’s work indicating that middle class incomes were actually declining during what had seemed like boom years at the turn of the millennium. She had discovered, he said, “the greatest crisis in America.” …
When Piketty published ”Capital in the Twenty-First Century,” he closed the book with a call for a new tax, not on income, but on accumulated fortunes. Only this ambitious new effort to corral the rich, he insisted, and could reverse the grim expansion of economic inequality under capitalism.
In Washington, this policy advice was regarded as the book’s principal flaw. A wealth tax was silly. It could never happen. It was the sort of thing a very smart but impractical academic might propose. No Democrat in Congress wrote any legislation pursuing Piketty’s idea. Nobody even assigned staff to investigate the idea further.
Until Warren ran for president. Working with Piketty disciples Emmanuel Saez and Gabriel Zucman at the University of California, Berkeley, Warren put together a detailed, ambitious plan to tax the fortunes of billionaires and ultra-millionaires. By imposing a small annual tax on these hoards of wealth — just two cents for every dollar over $50 million, as Warren is fond of emphasizing — this new tax would raise billions in revenue for the federal government and, most important of all, take a sledgehammer to inequality.
This was a new idea in Washington. Ever since the administration of John F. Kennedy, taxation had been understood exclusively as a way to fund the government. Warren was offering taxation as a cure for inequality, not because the government is broke, but because inequality is bad.
And people loved it. According to one New York Times poll, a full two-thirds of the country supports Warren’s wealth tax. Even most millionaires support it, according to a CNBC survey.
A wealth tax is a very exciting idea for those who are envious of other people’s stuff, and want riches without work.
On the other hand, most extreme wealth nowadays is just due to asset shuffling, as asset prices rise on the flood of newly manufactured money. So the value to society of encouraging such extreme concentrations of wealth is very small.