Elizabeth Warren's latest give away is her promise to raise Social Security benefits by $200 per month for all current and future beneficiaries. Remember, Social Security will run out of money within ten years. Adding $200 per month for 64 million people means an additional cost of $153 billion per year. That's $153 billion each year forever, not just once.
Warren says she will pay for the extra cost by means of her wealth tax of 2% assessed against every American worth more than 50 million dollars. That means that it would take a bit more than 7.5 trillion dollars taxed every year on this wealth tax to come up with the needed cash.
There are about 1.2 million households in the country that are worth $10 million or more. There are fewer than 100,000 households worth $50 million. If you use 100,000 households and say that they are worth on average about 100 million dollars, then you have a total net worth for all of them of 10 trillion dollars. That means that for the first year, you will raise the needed cash to pay the Social Security bonus. But then the tax avoidance measures will kick in. How many of these rich people will have their lawyers and accountants find ways around the wealth tax? What do we do is people like Bill Gates or other billionaires decide that it would be lovely to live in the the Bahamas or Curacao or just some other country that doesn't impose these taxes? You can be sure that at least half of these people will find a way to avoid much of the tax. For example, if Jeff Bezos is planning to set up the Amazon Foundation on his death, might he not do that now. He could not only get an income tax deduction but he could also save the annual 2% wealth tax.
On top of the avoidance schemes, you would have the horrible impact that this move would have on the stock market. To use Bill Gates as an example again, what if he decides that he has to sell 3% of his Microsoft stock to pay for the wealth tax? After all, he will have to sell something. Dumping that stock on the market will depress prices for sure. As that happens in company after company, the entire market will decline. People who depend on their savings to supplement their social security will get squeezed. People who have 401K savings will get squeezed. It will be harder for new companies to raise capital, and that will slow economic growth. People across the country will have fewer job choices and unemployment will be higher.
The point is that we cannot tell exactly what the effect of this tax will be, but we know that it will surely hurt the economy and push us back towards the sort of stagnation that we saw under Obama.
Throw on top of this Warren's plan to raise income taxes to extreme levels and you can see just what is coming. The reality of a Warren economy would be an endless cycle of recession and stagnation punctuated by occasional depressions. It is a recipe for disaster.
Warren says she will pay for the extra cost by means of her wealth tax of 2% assessed against every American worth more than 50 million dollars. That means that it would take a bit more than 7.5 trillion dollars taxed every year on this wealth tax to come up with the needed cash.
There are about 1.2 million households in the country that are worth $10 million or more. There are fewer than 100,000 households worth $50 million. If you use 100,000 households and say that they are worth on average about 100 million dollars, then you have a total net worth for all of them of 10 trillion dollars. That means that for the first year, you will raise the needed cash to pay the Social Security bonus. But then the tax avoidance measures will kick in. How many of these rich people will have their lawyers and accountants find ways around the wealth tax? What do we do is people like Bill Gates or other billionaires decide that it would be lovely to live in the the Bahamas or Curacao or just some other country that doesn't impose these taxes? You can be sure that at least half of these people will find a way to avoid much of the tax. For example, if Jeff Bezos is planning to set up the Amazon Foundation on his death, might he not do that now. He could not only get an income tax deduction but he could also save the annual 2% wealth tax.
On top of the avoidance schemes, you would have the horrible impact that this move would have on the stock market. To use Bill Gates as an example again, what if he decides that he has to sell 3% of his Microsoft stock to pay for the wealth tax? After all, he will have to sell something. Dumping that stock on the market will depress prices for sure. As that happens in company after company, the entire market will decline. People who depend on their savings to supplement their social security will get squeezed. People who have 401K savings will get squeezed. It will be harder for new companies to raise capital, and that will slow economic growth. People across the country will have fewer job choices and unemployment will be higher.
The point is that we cannot tell exactly what the effect of this tax will be, but we know that it will surely hurt the economy and push us back towards the sort of stagnation that we saw under Obama.
Throw on top of this Warren's plan to raise income taxes to extreme levels and you can see just what is coming. The reality of a Warren economy would be an endless cycle of recession and stagnation punctuated by occasional depressions. It is a recipe for disaster.
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