7/08/2019

A Wealth Tax on the Rich Won’t End Deficits

"But what if the actual concentration of wealth is much lower than Saez and Zucman claim? Revenue from said tax would fall far short of the projection, calling into question a primary claimed benefit of advancing such an administratively cumbersome measure. This was the contention of economist Lawrence H. Summers and legal scholar Natasha Sarin, who are both personally sympathetic to taxing the rich but also argued in the Washington Post that the Saez-Zucman wealth tax would yield less than half of its promised revenue.

Saez and Zucman published a vigorous rejoinder to Summers and Sarin, asserting the accuracy of their numbers. They are far from neutral parties to arbitrate the dispute. Both economists are serving in advisory roles to the presidential campaign of Elizabeth Warren, a prominent champion of the wealth tax, and Zucman is the cofounder of a new initiative that seeks to politicize the economics profession around progressive-leaning activist causes. But at an even more fundamental level, the critics are correct. Saez and Zucman’s wealth-concentration stats are wildly exaggerated, leading them to severely overestimate the available revenue from taxing the same."