This "scoring" of the Warren wealth plan done by @Wharton & reported by @jimtankersley is wrong on a number of levels
For 1, the assessment assumes that the money from a wealth tax go to pay down the debt. That is NOT what @ewarren has proposed.
THREAD
nytimes.com/2019/11/14/bus…
For 1, the assessment assumes that the money from a wealth tax go to pay down the debt. That is NOT what @ewarren has proposed.
THREAD
nytimes.com/2019/11/14/bus…
In an economy w/ chronic demand shortfalls, we'd want to spend that money, which is precisely what @ewarren actually proposes!
Second, as @Econ_Marshall points out, taxing wealth DOES NOT necessarily lead to fall in investment.
Second, as @Econ_Marshall points out, taxing wealth DOES NOT necessarily lead to fall in investment.
Lots of recent empirical work has shown this long-time Neoclassical assumption to be false.
If we tax the wealth, and use those funds to ya know, decarbonize the economy, pay for universal childcare, make college free, etc. the gov will be SPENDING that money.
If we tax the wealth, and use those funds to ya know, decarbonize the economy, pay for universal childcare, make college free, etc. the gov will be SPENDING that money.
We're just shuffling around the spending. But given that low- and middle-income households have a higher marginal propensity to consume, we'd actually expect to see an INCREASE in economic growth from redistribution.
Lot's of excellent work recently has documented how inequality inhibits growth. Mitigating inequality via a wealth tax would therefore expand economic growth in most scenarios, including those actually proposed by @ewarren
For more on the relationship between inequality and growth, I suggest you pick up @HBoushey excellent new book Unbound: How inequality constricts our economy & what we can do about it. hup.harvard.edu/catalog.php?is…
