Warren's wealth tax would solve economic inequality, says economist Gabriel Zucman

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Taxing the rich to help the poor and middle class has defined the presidential campaigns of Senators Elizabeth Warren and Bernie Sanders.
Skeptics of the proposal argue that a wealth tax of this magnitude is impractical, and will not generate the revenue that Senator Warren and supporters anticipate. But French economist Gabriel Zucman, an early proponent of the tax, argues otherwise.
Zucman, now author of the book “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay,” joined The Final Round on Friday to discuss the profound effect the tax system has on American economic inequality, and how a wealth tax could change that.

‘The tax system is critically important’ to eradicating economic inequality

On Monday, Senator Elizabeth Warren unveiled an education plan that would dramatically increase federal funding for public schools over the next decade, siphoning money raised from her proposed wealth tax to cover the plan’s $450 billion cost. It is one of many proposals developed by the Massachusetts senator that depend almost wholly upon the success of her controversial wealth tax, which would impose a 2% annual tax on household net worth between $50 million and $1 billion.

Zucman said he believes such a tax could also be a solution to economic inequality exacerbated by the current U.S. tax system.

“Financial deregulation; the collapse of the minimum wage; higher college costs; the declining role of unions. All of these things have mattered a lot [to American economic inequality],” Zucman said. “But, when you try to look at the income and the wealth of the very rich, the tax system is critically important.

The U.S. used to have the most progressive tax system in the world, with top marginal income tax rates of more than 90% in the post-World War II decades, to estate tax rates to of close to 80% from the 1930s to the 1980s, and then you had a dramatic change in the 1980s. The top marginal income tax rate was reduced to 28%, and today, in 2018, for the first time in the last hundred years, billionaires have paid a lower tax rate – all taxes included – than the middle class and the working class. They pay 23% of their income in taxes; the rest of the population pays in between 25% and 30% of their income in taxes.”

https://finance.yahoo.com/news/warrens-wealth-tax-would-solve-economic-inequality-says-economist-gabriel-zucman-154526411.html