Elizabeth Warren’s proposed wealth tax could result in over 80,000 new full-time IRS agents, more than doubling the size of the IRS according to ATR analysis.
A recent report from the left-of-center Institute on Taxation and Economic Policy (ITEP) suggests spending $5 billion to properly enforce and administer a wealth tax.
If this money was spent exclusively on IRS employees, it would be the equivalent of 80,800 new full time agents based on the average salary of $61,800.
In FY 2018, the IRS used 73,519 full-time agents, meaning the Warren wealth tax could more than double the size of the IRS.
Even IRS lifers are admitting that the Warren wealth tax would be nearly impossible to administer. In a Bloomberg report former IRS Commissioner Mark Everson said: “It would be difficult for the Service to get its arms around the wealth tax…The more money people have the more they tend to have in non-traditional assets.”
Warren’s has proposed a wealth tax starting at 2 percent on Americans with assets above $50 million and 6 percent on taxpayers with more than $1 billion in assets. According to Warren’s analysis, this tax would raise taxes on American by $3.75 trillion over ten years – an extremely ambitious estimate that assumes high-earners do not relocate elsewhere.
Warren’s wealth tax would empower IRS agents to keep a list of all household assets, an extremely invasive power. The Warren wealth tax also contains a 40% “exit tax.”
Even the Washington Post editorial board said this arrangement “conveys a certain authoritarian odor.”
A wealth tax has failed every time it has been tried. In 1995, 15 OECD countries had a wealth tax. Today, only four still have a wealth tax: Switzerland, Belgium, Norway, and Spain. The 11 countries that repealed the wealth tax cited underwhelming revenue and extraordinary difficulty in collecting the tax as reasons for repeal.
The most recent country to repeal a wealth tax was France. The French wealth tax was imposed on assets over $1.4 million and led to an exodus of taxpayers from the country. In 2016 alone, 12,000 taxapayers left France, the highest outflow in the world. The year prior, in 2015, 10,000 millionaires left France for other countries, according to a report by New World Wealth.
The wealth tax proposed by Warren would be a nightmare to administer, would double the size of the IRS, would fail to generate revenue that supporters claim, and has failed every time it has been tried in the past.