Sen. Elizabeth Warren, D-Mass., will propose a new annual “wealth tax” on Americans with more than $50 million in assets, according to an economist advising her on the plan, as Democratic leaders vie for increasingly aggressive solutions to the nation’s soaring wealth inequality.

Emmanuel Saez and Gabriel Zucman, two left-leaning economists at the University of California, Berkeley, have been advising Warren on a proposal to levy a 2 percent wealth tax on Americans with assets above $50 million, as well as a 3 percent wealth tax on those who have more than $1 billion, Saez said.

The wealth tax would raise $2.75 trillion over a 10-year period from about 75,000 families, or less than 0.1 percent of U.S. households, Saez said.

“The Warren wealth tax is pretty big. We think it could have a significant effect on wealth concentration in the long run,” Saez said. “This is a very interesting development with deep root causes: The fact inequality has been increasing so much, particularly in wealth, and the feeling our current tax system doesn’t do a very good job taxing the very richest people.”

Warren’s proposal includes at least three new mechanisms to combat tax evasion. Those are a significant increase in funding for the Internal Revenue Service; a mandatory audit rate requiring a certain number of people who pay the wealth tax to be subject to an audit every year; and a one-time tax penalty for those who have more than $50 million and try to renounce their U.S. citizenship.


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