Facts on Warren’s Wealth Tax Plan

In her campaign speeches, Sen. Elizabeth Warren likes to say, “I’ve got a plan for that.” She has lots of plans, but there is one on which many of the others hinge: her plan for an “Ultra-Millionaire Tax,” an annual wealth tax on all assets over $50 million.

Warren, one of two dozen Democrats running for president, is counting on the revenue she projects it will raise to fund a host of her other priorities on child care, education and more.

But how would it work exactly? Have other countries tried it, and how did it work there? Will it really raise as much as Warren claims? (Spoiler: Some economists doubt it.) And what do Americans think about the idea?

We’ll try to answer some of those questions below.

What is Warren’s ‘Ultra Millionaire Tax’ plan?

Many of the Democrats running for president have talked about raising taxes on wealthy Americans. Most have talked about repealing some of the income tax relief granted to high-income earners through the Republican-crafted Tax Cuts and Jobs Act, which affects largely income.

Under Warren’s wealth tax plan, households would pay an annual 2% tax on all assets — net worth — above $50 million, and a 3% tax on every dollar of net worth above $1 billion.

What’s included in the calculation? Almost everything. As Warren’s campaign website explains, “All household assets held anywhere in the world will be included in the net worth measurement, including residences, closely held businesses, assets held in trust, retirement assets, assets held by minor children, and personal property with a value of $50,000 or more.”

Or, as Warren put it in a tweet, “If you own a home, you’re already paying a wealth tax — it’s called a property tax. I just want the ultra-rich to pay a wealth tax on the diamonds, the yachts, and the Rembrandts too.”

University of California, Berkeley, economists Gabriel Zucman and Emmanuel Saez, would fall on about 75,000 U.S. households (less than 0.1%) and would raise around $2.75 trillion over 10 years.