The 2.75 trillion raised over the next ten years by these taxes will be used to provide universal childcare and pre-kindergarten, cancel 95% of student loan debt, make public colleges tuition-free, and invest if green manufacturing practices.
And to much of the US, that sounds pretty good. After all, it’s not like those wealthy people are going to go hungry or anything. And who doesn’t want free education?
The problem is that those proposals she has made will cost much more than the 2.75 trillion she says it will, particularly when you include her plan of Medicare for All and the Green New Deal. The amount of money needed is closer to $126.6 trillion in actuality, forcing the national deficit to only rise.
The other major problem is that the plan isn’t even constitutional.
Warren’s plan states that “All household assets held anywhere in the world will be included in the net worth measurement, including residences, closely-held businesses, assets held in trust, retirement assets, assets held by minor children, and personal property with a value of $50,000 or more.”
Under the constitution, a wealth tax such as this is considered to be a ‘direct taxation’ because it is levied on the amount of wealth a person has, or at least how much they report to having, and not just their annual income. It is also directly taken out by the federal government instead of being handled through the states, as sales or income tax would be.
And the Constitution makes it clear that all direct taxes must be “apportioned among the several States” according to “the Census or Enumeration herein.” Basically, this means that the taxes must be split between each state depending on that state’s population, not its wealth. For example, if a state contains 11% of the national population, then it must pay 11% of the tax, regardless of how much money or assets its occupants have.
So let’s say that two states have nearly the same amount of people living in them, like Missouri which according to 2010s census had 5, 988, 927 (1.93% of the nation’s population, and Maryland, who has 5, 773, 552 people or 1.87% of the population. The percentages are fairly close.
According to apportioned taxes, Missouri would have to pay more in taxes. However, according to the 2010 census. Maryland is the wealthier state, with the median income around $70,647 in comparison to Missouri, whose average citizen only makes $46, 262 annually.
And as you can see, this would be unfair to many states, leaving poorer states to possibly pay much more than wealthier states with a fewer population. In addition, what would keep wealthy individuals from merely moving their assets to a state with lower tax burdens? Nothing, which is precisely why Warren doesn’t want the tax apportioned.
But if it isn’t, then it is illegal. Warren would have to somehow convince congress that this is an indirect tax for it not to be apportioned. However, since the tax is applied to people and possessions and not their transactions, sales, or even income, it will be an impossible tax.
For a former Harvard law professor who undoubtedly knows these rules, it’s clear she is just trying to fool the public to give her their vote because she could never pull this plan off.