Elizabeth Warren's Budget Math Still Doesn't Work
On the campaign trail, Sen. Elizabeth Warren (D–Mass.) is promising voters that she " has a plan for that "—no matter what "that" is.
But her plans don't add up.
Take Warren's appearance last week on The View , where she overestimated the number of programs she could fund with her proposed wealth tax of 2 percent on personal net worth over $50 million dollars and 3 percent on net worth over $1 billion. Warren name-checked her student loan forgiveness and tuition-free college plan, her childcare plan, and a proposal to increase teacher pay as programs she'd fund with the wealth tax.
According to University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman, Warren's wealth tax would raise $2.75 trillion dollars over the next decade.
Warren's student loan forgiveness and tuition-free college plan would forgive up to $50,000 in student debt owed by households who earn less than $100,000 in income while offering smaller student debt forgiveness to households earning between $100,000 and $250,000. The plan also would make every public two-year and four-year college in the country tuition-free, increase Pell Grant funding by $100 billion, and create a fund to support historically black colleges and universities (HBCUs). Combined, this plan would cost $1.25 trillion over the next decade.
Warren's child-care plan has several planks: providing universal pre-K, funding childcare for all, and raising childcare worker wages. Specifically, the plan would have the federal government work with state and local governments to create a network of free child care centers, preschool, and in-home care options, while raising child care worker wages to those of comparable public school teachers. This combination of proposals will cost roughly $1.7 trillion over the next decade, according to an analysis from Moody's.
Warren also mentioned a plan to raise teacher pay on top of these other proposals. The Massachusetts senator hasn't released a policy on raising teacher pay specifically, so let's instead look at plans from fellow Democratic candidates Julian Castro and Sen. Kamala Harris (D–Calif.). Harris's plan to raise average annual teacher pay by $13,500 would cost $315 billion over the next 10 years, according to the Harris campaign. I reached out to the Warren campaign to see if they had a cost estimate for their teacher pay plan, but the campaign has yet to respond. I will update this post if the campaign gets back to me, and in the meantime, I used $315 billion as an approximation.
Taken altogether, Warren's proposals would cost $3.265 trillion* over the next decade, compared to the $2.75 trillion raised by the wealth tax. That means a wealth tax isn't enough to fund these programs. But that's a common theme among Democratic policy proposals released thus far. Sen. Bernie Sanders (I–Vt.) offered $15 trillion in tax increases to fund Medicare for All, which is estimated to cost $32 trillion . And it's not just Democrats: Republicans passed a roughly $1.5 trillion dollar tax cut without any compensating spending cuts.
What's more, economists have questioned whether $2.75 trillion is an accurate estimate of wealth tax revenue. Former Clinton administration Treasury Secretary Larry Summers called into question Saez and Zucman's estimate, arguing that they dramatically underestimate the enforcement problems with a wealth tax, and said the tax might raise only 40 percent of that projection. The University of Chicago Booth School of Business polled economic experts and found that 73 percent either agreed or strongly agreed that the wealth tax would pose significantly more enforcement challenges than existing taxes due to difficulties of measuring net worth.
European countries have moved away from wealth taxes—12 countries had wealth taxes in 1990, while only four did by 2017. Before those taxes were abolished, they played a minimal role in revenue generation. These countries recognized that the wealth tax poses real economic problems. They treat personal wealth, like a mansion, the same as productive business investments like factories or tools, which impedes both enforcement and economic growth.
The bottom line is that Warren can't pay for all the things she's promising.
The really important thing is …… "They" …… Like her.
She does carry a big bag of Hiccups ! She puts it "Under the Table" when she speaks.
Anyone for a "Beer" ?
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It was her Great, Great, Great, Great, Great, Great, Great …whew…. Great, Great, Great grandmother. So she was told anyway.
Ah yes the one that crossed the land bridge before Native Americans. That's why her Native American blood line didn't pan out, she is more Native than todays Native Americans.
"The object clearly does not match the inset, and you can see for yourself in the photos below that the object is actually a Grecian urn."
"Warrens campaign posted two photos of her kitchen cabinet from different angles that show the figurine is actually a vase, and not one with racist overtones."
The whopper of a lie claiming it was a racist artifact (that many right wingers apparently thought they recognized only because they have several real ones on their shelves) earned the full "PANTS ON FIRE" rating.
It's a joke don't take it so hard.
Now what isn't a joke is the proposals this ancestor thief has put out there.
Free Healthcare. Yes we know that the socialist in this country think this is a great idea and all we have to do is tax the rich to pay for it.
Free college. Also wipe the slate clean of the 1.25 trillion student loan debts. And of course she paying for this by taxing the rich.
Free child care. Of course the 700 billion would come from taxing the rich.
500 billion so everyone can have a home.....Deja Vu
And of course Reparations for blacks just to cement that vote.
Seems to me like this "scholar" puts a lot of faith on taxes coming from a minority.
For better or worse, Warren seems to be the only person on either side of the aisle right now that is showing any modicum of leadership on any issue.
Campaigning for unrealistic ideas is not leadership, and there are still great portions of her "plan" that are utterly unrealistic.
If an admiral had declared that Navy fighters were going to use Pensacola as the main airstrip for missions over Iraq with no mid-air refueling, you would not consider that "leadership".
Neither do plans constitute "leadership" if they require the collection of completely implausible tax amounts.
Recycling failed ideas that didn’t work in Europe.
shes the perfect progressive.