Elizabeth Warren and Bernie Sanders have the same two outside advisors who thank for forming their proposals on wealth taxation: University of California, Berkeley Economics Emmanuel Saez and Gabriel Zuckman.
Every presidential candidate wants to address wealth inequality by raising trillions of dollars in wealth tax revenue – other than income – millionaires and billionaires – an idea backed by Saes and Zukman's research.
There are competing explanations for increasing inequality. On the one hand, they argue that the concentration of wealth is a natural consequence of globalization, technology growth and economic growth, which give enormous rewards to the smartest, most innovative and hard-working people. The sharp increase in tax rates, they said, is holding back innovation and damaging the economy.
Another camp sees the rise of inequality as unjust, immoral and a threat to society.
Saez and Zukman are definitely in the second camp.
Saez, 46, and Zukman, 32, both originally from France and each working in the past with Thomas Pickett, a renowned French economist whose research on wealth and income inequality made him bestselling author. Using new sources of data, such as separate tax records, Pickett changed the discussion about inequality and wealth taxes. Pickett's central argument in his book Capital in the Twenty-First Century published in 201
In the United States, Saetz and Zukman assumed the mantle as the leading proponents of Piquette-style economic policies. The two examined tax havens, the lack of wealth taxation by the government, and how these factors affect wealth distribution as a whole.
Zukman, in a May profile from Bloomberg, who called him a "wealth detective who finds super money" super ", said he took up the cause of finding economic inequalities during an internship at a French brokerage firm when he was instructed to write comments for He just graduated from Piketty's Paris School of Economics and found data that shows that billions of dollars go from big economies to smaller ones, such as Bermuda, Cayman Islands, Hong Kong and Singapore, such locations have been known for offshore billing for large corporations and wealthy people.
Zyukman subsequently became a critic of the use of tax havens by corporations and the rich. He has gained prominence in the debate on public policy. n tax evasion after the Panama Papers.
Zuckman's research focused on quantifying such phenomena as tax evasion and determining what policy failures might be the cause. It is also known for offering tax avoidance through proper valuation and taxation of wealth. Saes gained prestige by researching income inequality and tax policies that helped him become a MacArthur Fellow in 2010. In 2009, he won the prestigious John Bates Clark Medal, awarded to an American economist under the age of 40, who is thought to have made the most important contribution to economic thought and knowledge.
They argue that globalization does not work if it leads to tax cuts for rich and multinational companies and higher taxes for retirees and small businesses. They also believe that economic inequality is detrimental to democracy.
"I think extreme inequality is certainly a very serious threat to democratic institutions. It is difficult to say that it is really too extreme," Zuckman said in an interview with the Stigler Center at the University of Chicago.
Zukman points to reforming banks in Switzerland and other places that were previously offshore tax evasion areas in the past decade as proof of his ideas may work. He says there was initially a lot of skepticism that the global financial system could actually reduce tax evasion by forcing banks to send information to the tax authorities of other countries. "This is the law now," Zuckman told the Stigler Center.
Two economists also cited earlier periods of relative economic equality in the US for examples of the political regimes they wanted to see, noting that the highest income tax rate was above 90% in the late 1950s and early 1960s. . Saez and Zukman also publicly support the proposal of Alexandria Okazio-Cortez's reputation for a 70% tax rate on revenues in excess of $ 10 million.
"The US considered itself much more equal than Europe in the 19th century. That's what Tocqueville, when he came to the US, in one sense noted the American egalitarian ethos," Zuckman said at the Stigler Center.
Warren and Sanders seek a sharp reduction in inequality, using the idea of a wealth tax boosted by two economists.
The Sanders Wealth Tax Plan would fetch $ 4.35 trillion over 10 years, according to Saes and Zuckman, for programs such as Medicare for All and universal childcare. It will apply to households with a net worth exceeding $ 32 million, representing about 180,000 households – the highest 0.1% – starting at 1% of the tax rate and increasing to 8% for couples with a wealth of more than $ 10 billion
. in contrast, Warren's plan for the decade would result in approximately $ 2.75 trillion, also calculated by Saez and Zuckman, by levying a wealth tax of 2% on assets worth more than $ 50 million and a 3 percent wealth tax over 1 billion dollars. Saez and Zukman estimate the tax will hit about 75,000 families.
As they advise on both campaigns, Sayets and Zukman compared the two proposals for wealth taxation in a recent analysis.
In 2018, Bill Gates was worth about $ 97 billion. If Warren's taxes had existed since 1982, according to Saez and Zuckman, Gates would be worth just $ 36.4 billion. According to Sanders 'tax plan, Gates' net worth would be a relatively small $ 9.9 billion.
The concept of wealth tax has given rise to some controversy among economists.
For example, Larry Summers, a former president of Harvard University and President Barack Obama's economic adviser, called Saes and Zuckman's estimates of wealth tax revenues "naively high."
One possibility is that instead of paying tax, wealthy lawyers would strategically donate their money to charities, reducing their tax base. "It may be important to consider that the wealthy (and their tax planners) will inevitably be motivated to limit their tax liability," Summers and another professor argued in an article in the Washington Post .  More generally, other economists say that it will be difficult for the government to accurately estimate the value of the assets of the rich, given the ability of wealthy families to hire tax lawyers to deal with complex evasion planning. Warren's wealth tax plans "work very poorly in practice," said Colombian Kopchuk . "There is a reason why many countries are deprived of wealth taxes."
So far, at least 15 European countries have tried to file wealth taxes. Although all but four have abolished them, Saes and the Zukman of France have lately been home.