The Richest Would Lose About Half Their Wealth Under Warren’s Tax Plan
Showing once again she is no friend to big business and the wealthy people who own the companies, billionaires like Jeff Bezos, Bill Gates and Warren Buffett would lose hundreds of billions of dollars in net worth if 2020 Democratic Primary hopeful Elizabeth Warren’s wealth tax plan ever went into effect.
Warren’s proposed “wealth tax” would hit the wealthiest 75,000 households with a 2% annual tax each year on net worth above $50 million, and a 3% tax on every dollar above $1 billion, helping combat wealth inequality, according to the Massachusetts Senator.
The top 15 richest Americans would have seen their net worth decline by more than half down to $433.9 billion if Warren’s plan had been in place since 1982, according to University of Cal Berkeley professors Emmanuel Saez and Gabriel Zucman.
To get to that figure the authors had to rely on some hypothetical assumptions and they didn’t take into account things the billionaires could have done to shelter some of their income, like saving less or giving more money away. They actually assumed the rich would do the opposite and reduce their charitable spending rather than give more away in proportion to the money lost via the tax.
Bezos, the Amazon founder, had an estimated net worth of $160 billion in 2018 before his divorce settlement, and that fortune would have been reduced to $86.8 billion. Microsoft’s Gates would have seen his fortune slashed from an estimated $97 billion to $34.6 billion, while Berkshire Hathaway’s Buffett would have seen his net worth decrease from $88.3 billion to $29.6 billion. Facebook founder Mark Zuckerberg’s fortune would have shrank from $61 billion to $44.2 and Oracle’s Larry Ellison’s wealth would have shrank from $58.4 billion to $23.5 billion.
Billionaires who have made their money much more recently (such as Bezos and Zuckerberg) would have seen their fortunes less eroded because they’ve been subject to the tax for a shorter period of time.
Critics of Warren‘s wealth tax say it would be too hard to administer and likely wouldn’t even be constitutional.