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Noah Smith

A Wealth Tax Is Better Than Some of the Alternatives

It would raise more money than higher rates on incomes, but an inheritance tax would be preferable.

An art, not a sciance. — An art, not a sciance.
Photographer: Dennis Brack/Bloomberg

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January 31, 2019, 12:30 PM UTC

Close on the heels of Representative Alexandria Ocasio-Cortez’s proposal to tax top income at 70 percent, Senator Elizabeth Warren has released her own big idea — a tax of 2 percent a year on all wealth above $50 million, rising to 3 percent for those fortunes of more than $1 billion. The proposal, which would affect about 75,000 of the country’s wealthiest people, also comes with a set of measures designed to reduce avoidance and evasion.

The motivation for taxing wealth directly undoubtedly comes from the observation that the most prosperous Americans own a larger share than they used to: