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Here's how much smaller the top 11 billionaires' fortunes would've been if Bernie Sanders' or Elizabeth Warren's proposed wealth taxes had been around since 1982
Here's how much smaller the top 11 billionaires' fortunes would've been if Bernie Sanders' or Elizabeth Warren's proposed wealth taxes had been around since 1982
Joseph Zeballos-RoigNov 13, 2019, 19:22 IST
Bill Gates and Mark Zuckerberg are among the wealthiest men in the United States.Gerard Julian/AFP and Nicolas Liponne/NurPhoto
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Sens. Bernie Sanders and Elizabeth Warren have put forward the two most ambitious plans in the Democratic primary to tax the wealth of the richest Americans, shrink their giant fortunes, and curb their economic power.
The level of income inequality in the US is reaching levels not seen since the 1920s, according to researchers, sparking a fierce debate in the Democratic primary over how to narrow it.
"At the top, wealth is no longer about insurance, it's really about power - having a lot of wealth allows you to have disproportionate influence on society," economist Emmanuel Saez told Business Insider.
Here's how much smaller the top 11 billionaires' fortunes would've been if Sanders' or Warren's proposed wealth taxes had been around since 1982, the first year Forbes magazine started estimating wealth.
Sens. Bernie Sanders and Elizabeth Warren have put forward the two most ambitious plans in the Democratic primary to tax the wealth of the richest Americans and shrink their giant fortunes.
Both Sanders and Warren aim to sharply curb the economic power that the super-rich have amassed in recent decades - and use their money to finance new social programs like Medicare for All and tuition-free college to benefit working-class Americans.
Research shows the nation's riches are increasingly confined at the top of the economic pyramid.
Progressive economists Emmanuel Saez and Gabriel Zucman, who have provided economic analysis for both the Warren and Sanders campaigns, found that the 400 richest Americans own more wealth than the 150 million adults in the bottom 60% of wealth distribution, the Washington Post reported.
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"Wealth for the ordinary American family is safety, it allows you to absorb economic shocks such as losing a job," Saez told Business Insider. "At the top, wealth is no longer about insurance, it's really about power - having a lot of wealth allows you to have disproportionate influence on society."
Warren is seeking to redistribute capitalism's rewards to a larger share of the population. It would kick in at $50 million with households paying a 2% annual tax on their assets like stocks, paintings, yachts, and homes. Then it would be ramped up to 6% for households with fortunes over $1 billion.
It's distinct from Sanders, who rolled out a proposal of his own taking aim at the existence of billionaires. The Vermont senator would impose a 1% annual tax starting at net worths of $32 million and gradually increase it to 8% on fortunes above $10 billion.
However, since Warren recently increased her top tax rate from 3% to 6%, both plans are now "almost identical," Saez says, referring to possible revenue generated and their overall redistributive effects.
Critics have argued the taxes wouldn't be effective because it would harm economic growth instead. Economists have also argued that the wealthy people subject to the tax would use accounting to evade the taxes and shelter their assets.
With that in mind, here's how much smaller the fortunes of the richest 11 US citizens would've been if Sanders' or Warren's proposed wealth taxes had been around since 1982, the first year Forbes magazine started estimating wealth.
These figures assume no evasion rate and are based on estimates from Saez and Zucman.
Walmart heir Jim Walton. Actual 2018 net worth: $45.2 billion
Net worth under revised Warren wealth tax: $7.8 billion
Net worth under Sanders wealth tax: $5.0 billion
Bloomberg LP founder Michael Bloomberg. Actual 2018 net worth: $51.8 billion
Net worth under revised Warren wealth tax: $12.3 billion
Net worth under Sanders wealth tax: $11.3 billion
Earlier this year, Bloomberg suggested a wealth tax could be unconstitutional and raised the prospect of America turning into Venezuela.
Google founder Sergey Brin. Actual 2018 net worth: $52.4 billion.
Net worth under revised Warren wealth tax: $21.4 billion
Net worth under Sanders wealth tax: $19.0 billion
Koch Industries executives Charles and David Koch. Actual 2018 net worth: $53.5 billion each.
Net worth under the revised Warren wealth tax: $7.9 billion
Net worth under the Sanders wealth tax: $8.0 billion
David Koch died in August, and it is unclear what will happen to Koch's estate. David was included in Saez and Zucman's analysis since it examines the wealthiest US citizens as of year end 2018.
Google founder Larry Page. Actual 2018 net worth: $53.8 billion.
Net worth under revised Warren wealth tax: $22 billion
Net worth under Sanders wealth tax:: $19.5 billion
Oracle founder Larry Ellison. Actual 2018 net worth: $58.4 billion.
Net worth under revised Warren wealth tax: $10.3 billion
Net worth under Sanders wealth tax: $8.5 billion
Facebook founder and CEO Mark Zuckerberg. Actual 2018 net worth: $61 billion.
Net worth under revised Warren wealth tax: $32.5 billion
Net worth under Sanders wealth tax: $28.6 billion
Last month, Zuckerberg expressed concern in a Fox News interview that eliminating billionaires would hurt competition, though he was uneasy with the level of inequality in the United States.
"I think it's good that there are different philanthropies and different organizations that can put competing ideas out about how to do research or science. … I fundamentally believe in that competition that you want different ideas out there," Zuckerberg said.
Berkshire Hathaway CEO Warren Buffett. Actual 2018 net worth: $88.3 billion.
Net worth under revised Warren wealth tax: $10.4 billion
Net worth under Sanders wealth tax:: $8.2 billion
Buffet has come out in favor of paying more taxes.
Microsoft founder Bill Gates. Actual 2018 net worth: $97 billion.
Net worth under revised Warren wealth tax: $13.9 billion
Net worth under Sanders wealth tax: $9.9 billion
Last week, Gates joked he didn't know how much money he would have left over if a wealth tax was implemented, but defended the amount of money he's paid to the government.
