An added wealth tax raises nearly nothing: In order to raise revenues for her Medicare-for-All proposal, Warren added an additional 3% wealth tax on billionaires to her fiscal plan, which imposes a 2% tax on household wealth over $50 million and now a 6% tax (up from her original 3%) on household wealth over $1 billion.
The analysis from the Penn Wharton Budget Model - a nonpartisan research institution at the University of Pennsylvania - also estimated that Warren's signature plan would raise between $2.3 trillion to $2.7 trillion in revenue from fiscal years 2021 to 2030. However, analysis from the nonpartisan Penn Wharton Budget Model released Thursday contradicts Warren's claims of how the tax would affect the country.
The proposed wealth tax would shrink the economy between 0.9 and 2.1 percent by 2050, depending on how the additional tax revenue is spent. That is more than $1 trillion less than the $3.75 trillion Warren claims it would raise.
Average hourly wages in the economy, including wages earned by households not directly subject to the wealth tax, are projected to fall between 0.8 and 2.3 percent due to the reduction in private capital formation.
The studies underscore the risk Warren took introducing so many - and such detailed - plans so early in the campaign. It's given the senator an economic populist edge that helped vault her among the Democratic primary's front-runners. The race's other top progressive candidate, Sen.
The model's findings could provide new lines of attack for some of Warren's more moderate White House hopeful rivals. That includes South Bend, Indiana, Mayor Pete Buttigieg and former Vice President Joe Biden, who has accused Warren of basing her policy agenda on economics that don't add up and argued that she and Sanders have demonized wealth.
The release of the study came hours before Warren was set to deliver an economic address in New Hampshire on how "corruption has fueled the economic challenges facing working families".
The study's authors, though, conceded they couldn't fully analyze wealth tax avoidance by billionaires without specific legislative language and noted the Warren campaign has stressed that significant enforcement efforts would be in place.
According to CNBC, "Warren's wealth tax would also impose a 2% tax on net worth between $50 million and $1 billion and scale upward by wealth brackets until the final 6% rate".
Most of her assertions are backed by an all-star panel of experts, including Mark Zandi of Moody's Analytics, Simon Johnson, former chief economist of the International Monetary Fund, and leading inequality and tax specialists Emmanuel Saez and Gabriel Zucman of University of California, Berkeley.
"This is an analysis of a different and worse plan than Elizabeth's, using unsupportable assumptions about how the economy works, and its conclusions are meaningless", the spokesman said, according to CNBC.