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1/ Some thoughts on @SenWarren proposal to tax wealth above 50 million at 2%.
It is an idea very much worth considering. A number of details (related to design and implementation) will need to be worked out, but it is a step in the right direction.
washingtonpost.com/outlook/2019/0…
It is an idea very much worth considering. A number of details (related to design and implementation) will need to be worked out, but it is a step in the right direction.
washingtonpost.com/outlook/2019/0…
2/ People have discussed implications of this proposal for revenue, labor supply and inequality, which is obviously important.
But I would also highlight another angle: proposal's implications for "savings glut", long term interest rate and the broader macro economy.
But I would also highlight another angle: proposal's implications for "savings glut", long term interest rate and the broader macro economy.
3/ A somewhat subtle, but important, implication of very high wealth inequality combined with very low inter-generational mobility is a glut of gross savings and very low interest rates.
Beyond a point, this leads to malfunctions such as "liquidity traps" and financial bubbles
Beyond a point, this leads to malfunctions such as "liquidity traps" and financial bubbles
4/ There is good evidence that the economy has been suffering from such ailments. Sen Warren's proposal addresses this problem in a fundamental way.
(kudos to @gabriel_zucman for the terrific research behind this proposal)
(kudos to @gabriel_zucman for the terrific research behind this proposal)
