Even Alexandria Ocasio-Cortez is skeptical about the viability of Elizabeth Warren’s wealth tax to pay for trillions of dollars in government programs and address income inequality.
“It’s not something that’s discussed a lot” in Congress, Ocasio-Cortez told Bloomberg News on Thursday. “I think there is a political will for it in the electorate, so it’s a matter of, will the more corporate-friendly wing of the party be down for it?”
Warren and Sanders have campaigned on the idea that a wealth tax -- rather than higher income taxes -- is the best way to raise trillions in revenue and diminish the fortunes of millionaires and billionaires who are able to grow their wealth without earning any taxable income.
Cory Booker and Warren sparred at the presidential debate Wednesday night over her wealth tax proposal, which would tax fortunes of more than $50 million at 2% and put a 6% levy on those in excess of $1 billion. Booker called the tax “cumbersome” and difficult to enforce.
Ocasio-Cortez, who endorsed Sanders, isn’t alone in her skepticism -- even among the left wing of the Democratic Party -- that a wealth tax has a viable path beyond the 2020 campaign trail. Democrats have begun drafting other plans to tax the rich in an attempt to devise alternatives if Warren or Sanders were to win and push their tax agenda.
“If you’re asking about the wealth tax, no,” said Representative Bill Pascrell, a senior Democrat and progressive on the House Ways and Means Committee, the panel that would have to draft and pass the levy.
House and Senate Democrats are releasing several draft bills to circulate ahead of the 2020 election that could raise trillions in tax revenue without a wealth tax. Ideas under consideration include a tax on stock and bond sales, large surtaxes for millionaires on income, and taxing investments annually instead of when they are sold.
Ocasio-Cortez is among those drafting tax plans that could be floated as alternative revenue raiser under a Democratic presidency. She’s planning to release a $2 trillion plan next year that would raise the top tax rate to 59% and tax investments annually.
“We are a long way from making any determination” on a wealth tax, Representative Judy Chu, another progressive Democrat, said. “We’ll have to see how the primaries turn out before we consider taking that up.”
© Copyright 2021 Bloomberg News. All rights reserved.