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A few responses to questions about Warren’s wealth tax proposal, which is well summarized here. 1/7
Yes, there would undoubtedly be evasion. But the question is whether other taxes can tax the uber-wealthy with less evasion and lower administrative and compliance costs. It’s not clear they would be all that different. 2/6
Some have pointed to relatively high estimates of evasion under wealth transfer and wealth taxes. Most of those estimates are outdated. They were done before FATCA and its progeny which, starting in 2014, dramatically improved our ability to uncover hidden, offshore accounts. 3/6
For details on FATCA, see itep.org/foreign-accoun… Big data has also made it much easier to value assets over the past decade. 4/6
Some have asked whether a wealth tax is constitutional. I’m no constitutional law expert, but a lot of them think it is. See: repository.law.indiana.edu/cgi/viewconten…, 5/6
Some have argued it is more efficient to increase taxes on capital income and inheritances directly. They make good points. But absent mark-to-market taxation, repealing stepped-up basis, and including inheritances in income, a wealth tax is worth serious consideration. 6/6
