On Thursday, Senator Elizabeth Warren announced on Twitter that she will institute a wealth tax if she is elected president in 2020. Here are the facts you need to know:

Warren tweeted her plan on Thursday afternoon.

We need structural change. That’s why I’m proposing something brand new – an annual tax on the wealth of the richest Americans. I’m calling it the “Ultra-Millionaire Tax” & it applies to that tippy top 0.1% – those with a net worth of over $50M.

— Elizabeth Warren (@ewarren) January 24, 2019

What are the details of Warren’s wealth tax?

Warren would impose a tax of two percent on any individual who has wealth (not e) with an estimated worth of $50 million, or three percent for those with net assets of more than $1 billion.

Nations with wealth taxes have steadily repealed them

Nine OECD nations have abolished their wealth tax since 1990. This includes Austria, Denmark, Germany, Finland, Luxembourg, and Sweden. France converted its former wealth tax into a graduated national real estate tax.

Only three OECD members have wealth taxes: Norway, Spain, and Switzerland. (Italy also imposes a tax on certain financial holdings overseas.)

How much money would Warren’s proposed wealth tax raise?

“The wealth tax would raise $2.75 trillion over a 10-year period from about 75,000 families,” according to Emmanuel Saez of the University of California at Berkeley, who helped Warren draft the plan. However, this assumes the tax has no negative consequences for the economy, which other nations have experienced.

Wealth taxes cost nations population, investment, and jobs

The wealth tax caused 513 taxpayers each year to leave France between 1982 and 2017.

Their departure did not just remove the wealth they had in the bank; it also deprived the country of all the investment and economic benefits that their billions would have created. Fondation iFRAP estimates the expatriates eligible for its wealth tax (Impôt de solidarité sur la fortune, or ISF) took €143 billion with them; the Coe-Rexecode Instituteestimated the cumulative total of the actual assets expatriated for fiscal reasons to “a little more than €200 billion.”

This translates to 400,000 jobs never created – or just under two percent of France’s total unemployment.

Similarly, Sweden’s wealth tax raised $500 million but cost the nation an estimated $166 billion before the nation abolished it in 2007.

The wealth tax reduces the net amount of taxes collected

France’s wealth tax costs the government an average of €5 billion a year in tax revenue, according to Kedge Business School. France’s wealth tax “brought in approximately €5 billion for the state in 2017 while at the same time depriving it of €7.5 billion due to the resulting expatriation,” according to Professor Eric Pichet.

In fact, the wealth tax reduces net revenues collected by the wealth tax itself. Fondation iFRAP estimates that the ISF reduced the amount of tax revenue raised by the ISF by an estimated €15.2 billion since 1982.

How would Warren prevent capital flight?

Warren plans to charge anyone attempting to renounce U.S. citizenship an unspecified, one-time penalty, if they are eligible for the wealth tax. She would also hike IRS funding so that IRS agents can audit a certain number of people eligible taxpayers each year.

The taxes raise little money and fail to redistribute wealth

An OECD report earlier this year concluded that “net wealth taxes have frequently failed to meet their redistributive goals. The revenues collected from net wealth taxes have also, with a few exceptions, been very low.”

A wealth tax taxes the same e twice

The wealth tax would levy an additional tax on money that Americans saved after paying e or capital gains taxes. This constitutes double taxation, unless the e tax is repealed. (Warren wants to raise both e and business taxes.)

Wealth taxes are difficult to calculate

e or capital gains taxes are relatively clear-cut: The total dollar figures are not in dispute. This is not true for the wealth tax. Either the federal government would have to hire an army of appraisers to determine the value of every possession owned by the wealthy – from homes to vehicles to rare books – or the wealthy would hire their own appraisers, who would have an incentive to minimize values.

Some items are inherently difficult to evaluate. The value of private businesses – which account for 40 percent of the wealth owned by top one percent of Americans – fluctuates daily. It is impossible to know the value of a business until it is sold.

Furthermore, almost two-thirds of the wealthiest Americans’ holdings are non-financial items: homes, cars, real estate, etc. These items provide no e and can only be monetized if they are sold.

A wealth tax is unconstitutional

Thomas Piketty, who advocated a wealth tax in his bestsellingCapital in the Twenty-First Century, hasadmitted, “I realize that this is unconstitutional, but constitutions have been changed throughout history.” The U.S. Constitution bars the federal government from imposing direct taxes under most circumstances. Article I, Section 9, Clause 4 states, “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.”The Supreme Court struck down a federal e tax as unconstitutional in its 1895 Pollock v. Farmers’ Loan & Trust Co. decision, because it is a direct tax. Only the Sixteenth Amendment allowed an e tax to take effect. Warren has not thus far advocated a constitutional amendment, which would require ratification by three-quarter of the states. However, constitutionality has not been the Left’s key criterion in evaluating tax or spending proposals.

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