Thread by @JustinWolfers

I don’t think I’ve seen the #BPEA room more crowded than it is for Saez and Zucman’s paper, suggesting there’s a lotta interest in the economic analysis of wealth taxation.
brookings.edu/bpea-articles/…

For a Warren-style tax on the wealthy:

Tax base = total wealth x top wealth share x (1 -evasion rate)

Total wealth = 5 x national income (up from 3x)
Top 0.1% wealth share = 20% (up from around 7% in 1980)
Evasion rate = ... just kidding; I’m expecting a brawl about this. #BPEA

Here’s @gabriel_zucman’s thread summarizing his paper with Saez:

https://twitter.com/gabriel_zucman/status/1169955996212617216?s=21

Do the wealthy pay higher taxes (as a share of income)?

This figure is sort of stunning:

Who loses from a wealth tax , and how will they ever get by?

Saez and Zucman name names and quantify the effects.

Big dispute: What share of wealth do the truly rich (say, top 0.1%) really hold. Estimates from different authors and methods range from a bit below 10% to above 20%.

It matters, because if the rich hold less, then a targeted wealth tax won’t raise as much as its proponents hope

An interesting idea for how to value hard-to-value assets, like private businesses: If there aren’t observable market prices, simply pay your tax bill in shares. An elegant solution to a technical problem, but it seems unlikely to be politically popular.

Discussant asks: Is a 3% wealth tax really a “moderate” tax rate?

If the rate of return on capital is also 3%, this is basically a 100% tax on capital income.

Even if the rate of return is 6%, this is still a 50% tax rate on capital income.