Early analysis shows Elizabeth Warren's wealth tax would slow US economic growth, but advocates argue it ignores the full impact

• A preliminary outside analysis of Sen. Elizabeth Warren's wealth tax proposal found it could hamper the nation's economic growth, but its supporters argue the study makes assumptions that ignores the fuller economic impact. 
• The early projection from the University of Pennsylvania's Penn Wharton Budget Model estimates that Warren's wealth tax would shave 0.2% off the nation's economic growth each year over a decade.
• However, the study makes a host of assumptions, and the projection didn't analyze the impact of Warren's sweeping agenda on the US economy.
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A preliminary outside analysis of Sen. Elizabeth Warren's wealth tax proposal found it could hamper the nation's economic growth, but its supporters argue the study makes assumptions that ignore the fuller economic impact. 

The early projection from the University of Pennsylvania's Penn Wharton Budget Model estimates that Warren's wealth tax would shave 0.2% off the nation's economic growth each year over a decade.

Annual growth would average out to 1.3% yearly instead of 1.5%, the analysis says.

The study projected the wealthiest Americans would consume more, but also save their money and invest less, prompting the economic slowdown, the New York Times reported.

However, the study leaves out other elements that could provide a fuller portrait of the wealth tax's impact on the economy. It didn't analyze the impact of rest of Warren's sweeping agenda, leaving out how it would interact with the tax dollars that the government collects.

The Penn estimate also assumes that Warren would spend the revenue generated from the tax towards paying down the federal debt, instead of her plans for student debt relief or her "Medicare for All." 

Warren fired back at the slower growth projection in a tweet: "Maybe if I were sticking $3 trillion under a mattress. But I'm not."

Other experts say Warren's plans could help expand the economy. Mark Zandi, an economist who analyzed the wealth tax for the campaign, wrote on Wednesday for CNN that "Warren's plans for child care, housing and green manufacturing would spur economic growth and produce more tax revenue."

Warren's wealth tax plan would kick in for Americans with net worths over $50 million, with households paying a 2% annual tax on their assets like stocks, yachts, and real estate. Then it would be ramped up to 6% for fortunes totaling over $1 billion.

The Times reported that her wealth tax combined with a plan to impose new ones on investment gains would draw over $3 trillion in revenue over ten years. But some experts say the wealth tax won't collect as much estimated revenue since rich citizens would attempt to evade them and shelter their assets.

The plan has drawn fierce criticism from some of the richest Americans and financiers. Hedge fund investor Leon Cooperman and Warren have traded barbs in recent weeks over her proposed wealth tax, which forms a key part of Warren's progressive campaign pitch.

Still, Warren has embraced the public disputes to distinguish herself from the rest of the primary field as a fighter for the middle-class.

She rolled out a "calculator for the billionaires" last week on her campaign website after Microsoft founder Bill Gates questioned he didn't know how much money he would have left over if the tax was implemented.

• Read more:
• Here's how much smaller the top 11 billionaires' fortunes would be if Bernie Sanders' or Elizabeth Warren's proposed wealth tax had been around since 1982
• Elizabeth Warren has a colossal $30 trillion progressive agenda. Here's a breakdown of how she plans to pay for it.
• Hillary Clinton slams Bernie Sanders' and Elizabeth Warren's wealth-tax plans as 'incredibly disruptive' and 'unworkable'