The Economics Show How to tax the top 1% with Natasha Sarin
Nov 4, 2024
Natasha Sarin, a Yale professor and former counselor to Treasury Secretary Janet Yellen, dives into the urgent need for tax reform aimed at the ultra-wealthy. She discusses the potential of a wealth tax and the complexities of taxing unrealized capital gains, spotlighting current disparities in the tax system. The conversation also touches on the impact of tax reforms on charitable giving and the staggering $600 billion revenue loss from uncollected taxes. Sarin offers a hopeful perspective on future policies that can enhance transparency and fairness in taxation.
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Need for Increased US Tax Revenue
- The US has significant revenue needs and a low tax rate compared to other OECD countries.
- The wealthiest Americans often accumulate wealth through capital gains, which are largely untaxed.
Challenges of Wealth Taxes
- Wealth taxes present practical challenges, such as accurately valuing assets like art and antiques.
- Volatility in individual wealth year by year adds complexity to wealth tax implementation.
Constitutionality of Wealth Taxes
- The constitutionality of a wealth tax is debated, with some arguing it would be deemed unconstitutional.
- A key challenge lies in the constitutional requirement for direct taxes to be apportioned among states based on population.