Warren wealth tax would hinder economic growth

Washington Free Beacon:

A new projection from the Penn Wharton Budget Model finds that the wealth tax supported by Democratic presidential candidate Sen. Elizabeth Warren (D., Mass.) would hinder the nation's economic growth.

The nonpartisan, research-based initiative calculated in an analysis due to be released Thursday afternoon that under the Massachusetts senator's plan, "annual economic growth would slow from an average of 1.5 percent to an average of just over 1.3 percent over a decade," equivalent to a roughly 13 percent reduction.

The analysis comes as economists and conservative analysts have criticized Warren's economic plans as based on unrealistic assumptions. Warren's Medicare for All proposal, for example, estimates a price tag of only $20.5 trillion across 10 years, despite the liberal Urban Institute placing the cost at around $34 trillion.

Penn Wharton director of policy analysis Richard Prisinzano told the New York Times that the reduction in growth would stem from wealthy Americans consuming more and investing less.

"The wealth tax shrinks the economy because saving is more expensive," he said. "The results also suggest that the negative effect of the tax increases as the tax rate increases."
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There is also an invalid assumption in Warren's plan that the government makes better investment decisions than an individual does with his own money.  But individuals do not acquire wealth by forcing others to give them money.  They have to provide goods and services that others are willing to pay for.