Ten Democratic candidates took the stage Wednesday for the party’s fifth presidential debate, held in Atlanta, Georgia, and co-hosted by MSNBC and The Washington Post. One of the most memorable moments of the night was a disagreement between Senators Elizabeth Warren and Cory Booker over Warren’s proposed tax on the wealthiest Americans. Her proposed wealth tax would kick in on assets of $50 million and higher. Both candidates agreed that inequality is a major issue in the U.S., but Booker said wealth taxes in other countries have not been effective and that there are better ways to raise revenue. The issue of economic inequality was a major theme throughout the debate. We speak with Gabriel Zucman, professor of economics at UC Berkeley. He is co-author of the new book, “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay.”
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- Part 3: Bernie Sanders Criticizes U.S. Relationships with Saudi Arabia and Israel at Democratic Debate
AMY GOODMAN: I’m Amy Goodman, with Nermeen Shaikh, as we continue last night’s debate in Atlanta. Senators Elizabeth Warren and Cory Booker clashed on Warren’s proposal to impose a 2% annual tax on wealth above $50 million.
SEN. ELIZABETH WARREN: Sure. So let me just tell you what we can do with that 2-cent wealth tax. Two cents on the top one-tenth of 1% in this country, and we can provide universal child care for every baby in this country ages 0 to 5. That is transformative. We can provide universal pre-K for every 3-year-old and 4-year-old in America. We can stop exploiting the women, largely black and brown women, who do this work. And we can raise the wages of every child care worker and preschool teacher in America. We can put 800 billion new federal dollars into all of our public schools. We can make college tuition-free for every kid. We can put $50 billion into historically black colleges and universities. And we can cancel student loan debt for 95% of the folks who’ve got it. Two-cent wealth tax, and we can invest in an entire generation’s future.
ANDREA MITCHELL: All right. Let me let Senator Booker respond.
SEN. ELIZABETH WARREN: Sure.
SEN. CORY BOOKER: You know, again, I agree with the need to do all of those things. We’re all united in wanting to see universal preschool. And I’ll fight for that. We’re all united in wanting to fund HBCUs. Heck, I wouldn’t be here if it wasn’t for two parents that went to HBCUs. But the tax, the way we’re putting it forward right now, the wealth tax, I’m sorry, it’s cumbersome. It’s been tried by other nations. It’s hard to evaluate. We can get the same amount of revenue through just taxation.
NERMEEN SHAIKH: So, that’s Senators Elizabeth Warren and Cory Booker at last night’s debate. I’d like to bring Gabriel Zucman into the conversation, professor of economics at Berkeley and co-author of the new book, The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay. So, Gabriel, your response to Elizabeth Warren’s tax plan and Cory Booker’s criticism of it?
GABRIEL ZUCMAN: Yeah, well, first, I think it’s fascinating to see the shift in the conversation about taxes among Democrats. You know, for a very long time, they were reluctant, most of them, to talk about more progressive taxation, to talk about taxing billionaires, in particular. And now we have these proposals about wealth taxation that are endorsed by major candidates. Elizabeth Warren is one example. Bernie Sanders also supports a wealth tax. In both cases, these are very progressive taxes, starting very high in the wealth distribution, above $50 million for Warren; with a rate as high as 6% above $1 billion, as high as 8% above $10 billion in the Sanders plan. So, this is a dramatic departure and a major change that I welcome in the conversation.
And of course there is some pushback. And we heard Senator Booker pushing back on the idea of wealth taxation. My answer to that is, I’ve studied the European experience with wealth taxation, and it’s true that it’s been largely a failure, but this is for preventable reasons. I think the U.S. is in a much stronger position to make a wealth tax work today. For instance, if you are a rich French person, you could avoid the wealth tax by moving to Belgium or moving to a low-tax country anywhere else in Europe. If you’re a wealthy American, you cannot avoid taxes by moving abroad, because the taxes follow you. Taxation is based on citizenship, so there’s not this problem of tax competition, for instance. The U.S. does much more to fight tax evasion, and could do even more in the future, than European countries have been doing. Many wealthy Europeans used to hide assets, and still do, in banks in Switzerland, in Luxembourg, in similar tax havens. The U.S. is a bit more aggressive when it comes to trying to collect information from these tax havens.
And one last thing, you know, there is this notion that wealth taxes are cumbersome or very hard to implement, because it’s hard to value assets. But it is not quite true, because when you look at the wealth of these very wealthy individuals who would be affected by the wealth taxes, about 70, 75% of their wealth is invested in listed securities, in equities, bonds, mutual fund shares, that have well-defined, well-measured market values. And so it’s actually pretty easy to tax these very wealthy Americans, potentially quite progressively.
AMY GOODMAN: And, Gabriel Zucman, I wanted to ask you about that recent Guardian piece you wrote, “Make no mistake: Medicare for All would cut taxes for most Americans.” The way the corporate media and the moderators, the questioners, in general, through these debates, ask about issues like Medicare for All is by saying, “Are you going to increase taxes?” Explain what the cost would be and, in fact, how people would actually save money.
GABRIEL ZUCMAN: Yes, that’s a very important question, and it’s something that’s still not very well understood, I feel, among the public. So, what’s very important to understand is that the way that healthcare is funded today, when it comes to employer-provided healthcare, is already through what you could call a big private tax, which is that employers have to pay private insurance companies to cover their workers. And that’s mandatory, essentially. And it’s a huge cost. It’s about $13,000 per worker. And the cost is the same no matter what the wage of the employee is. That is, it’s $13,000 for a secretary and for an executive.
So, if there was a transition to Medicare for All, here is what could happen. You could imagine that employers would be forced to convert the premiums that they currently pay to insurance companies into wages, so, for them, it will make no difference. For workers, it would make a huge difference, because their wage would increase essentially by $13,000, which would be the biggest pay raise in a generation for the vast majority of Americans. And then, of course, taxes would have to increase to pay for Medicare for All. But with smart taxes based on income or wealth or taxes on corporate profits, it’s very easy to make sure that for most workers, that the extra taxes would be much less than the gain in wage, this $13,000 wage increase, so that the net take-home pay — the increase in take-home pay would be, again, the biggest increase in a generation for 90% of workers.
AMY GOODMAN: And, of course, it would increase access to healthcare for everyone.