Would a billionaire tax help or hurt the American economy?

Ian Toner:

COVID-19 CAUSED BUSINESSES TO CLOSE AND MILLIONS OF AMERICANS TO FILE FOR UNEMPLOYMENT…AND AS A RESULT, THE PANDEMIC DEEPENED THE GULF BETWEEN THE ULTRA-WEALTHY AND THE WORKING CLASS. SOME DEMOCRATS SAY A BILLIONAIRE TAX WOULD HELP BRIDGE THAT GAP BY RAISING REVENUE TO PAY FOR SERVICES. BUT REPUBLICANS ARGUE IT WOULD END UP HURTING AMERICA’S ECONOMY. WHICH IS IT? LET’S GET THIS STRAIGHT.

IN MARCH, SENATORS BERNIE SANDERS AND ELIZABETH WARREN ANNOUNCED A NEW PLAN TO TAX THE WEALTHIEST AMERICANS. HERE’S A KEY PART OF THE PLAN: IT WOULD TAX THE WEALTHIEST AMERICANS AND TRUSTS ACCORDING TO THEIR NET WORTH, NOT JUST THEIR INCOME LEVEL.    

(SINCE WE’RE TALKING ABOUT INDIVIDUALS, HOUSEHOLDS AND TRUSTS, WE’RE REFERRING TO THEM COLLECTIVELY AS “FORTUNES.”)

ACCORDING TO THE PLAN: FORTUNES WORTH MORE THAN FIFTY MILLION DOLLARS WOULD FACE A TWO PERCENT TAX, WHILE FORTUNES WORTH MORE THAN A BILLION DOLLARS WOULD FACE A THREE PERCENT TAX. ECONOMISTS FROM CAL-BERKELEY SAY IT WOULD RAISE ABOUT THREE TRILLION DOLLARS IN NEW TAX REVENUE OVER A DECADE. 

DEMOCRATIC SENATORS AND THEIR SUPPORTERS SAY THAT MONEY COULD HELP FUND EDUCATION, INFRASTRUCTURE AND HEALTHCARE PROJECTS. BUT THAT’S JUST ONE PERSPECTIVE. ONE FORMER DEMOCRATIC TREASURY SECRETARY BELIEVES THE U-S WOULD NEVER SEE ANYTHING CLOSE TO THREE TRILLION DOLLARS IF THIS ACT BECAME LAW. HE EXPECTS BILLIONAIRES WOULD MOVE TO COUNTRIES WITH LOWER TAX RATES OR USE OTHER, LEGAL ACCOUNTING TACTICS TO AVOID TAXES. AFTER ALL, WORTH IS SUBJECTIVE.

ONE CONSERVATIVE THINK TANK SAYS A BILLIONAIRE TAX COULD SPARK A DECLINE IN LONG-TERM GDP…NEGATIVELY AFFECTING OUR NATION’S ECONOMIC WELL-BEING. AND A SIMILAR ANALYSIS BY THE UNIVERSITY OF PENNSYLVANIA FOUND A GDP DECLINE, TOO. 

GOT IT STRAIGHT? TIME TO DECIDE FOR YOURSELF. IF YOU’RE NOT ALREADY THERE, HEAD OVER TO OUR WEBSITE AND RATE THIS STORY USING OUR BIAS METER.