Warren Slams Economists Who Criticize Her Wealth Tax

“You leave two cents with the billionaires, they’re not eating more pizzas.”

Scott Varley/Orange County Register/Zuma

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Sen. Elizabeth Warren (D-Mass.) earned huge applause at Thursday night’s Democratic presidential debate by challenging a fundamental economic assumption.

A central component of Warren’s campaign involves a two-cent tax on every dollar of net worth above $50 million. Many economists have said that such a large tax increase could slow economic growth, notwithstanding the shining example of the equalizing potential of taxation: Franklin D. Roosevelt’s 1935 Wealth Tax, which helped mitigate income inequality and pull the country out of the Great Depression.

“How do you answer top economists who say taxes of this magnitude would stifle growth and investment?” moderator Judy Woodruff asked.

“Oh, they’re just wrong,” Warren replied, as the audience burst into cheers.

“For two cents, what can we do?” she continued. “We can provide universal childcare, early childhood education for every baby in this country age zero to five, universal pre-k for every three-year-old to four-year-old, and raise the wages of every childcare worker and preschool teacher.”

She also said that we could improve our public schools and cancel student debt. Then she challenged the disputed notion in trickle-down economic theory that wealthy people help the economy by putting their money back into it.

“You leave two cents with the billionaires, they’re not eating more pizzas,” she said. “They’re not buying more cars.” Instead, she proposed, “we invest that two percent in early childhood education and childcare—that means those babies get top-notch care.”

Watch Warren’s response below:

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THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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