Elizabeth Warren’s proposed wealth tax has ruffled quite a few feathers among America’s billionaire class, and her rhetorical battle with the superrich entered a new phase Wednesday when investor Leon Cooperman directed some choice words at the Massachusetts senator.
“In my opinion she represents the worst in politicians as she’s trying to demonize wealthy people because there are more poor people than wealthy people,” Cooperman told CNBC. “She’s disgraceful. She doesn’t know who the f--- she’s tweeting. I gave away more in the year than she has in her whole f----ing lifetime.”
Cooperman’s latest comments were spurred by a new campaign ad from Warren that calls out Cooperman for resisting her call for a wealth tax. The ad, which also names former CEO of TD Ameritrade Joe Ricketts, former Goldman Sachs CEO Lloyd Blankfein and tech investor Peter Thiel, is scheduled to play on CNBC, in what appears to be a deliberate attempt to troll the investing class that has recoiled with horror from Warren’s tax proposals.
The Warren campaign doesn’t seem to mind the attention, though. It responded to Cooperman’s comments with a play on the “OK boomer” meme that quickly made its way across social media, providing more free advertising for Warren while burnishing her progressive credentials among Democratic voters. “Psst, rich guys,” said Vox’s Emily Stewart, “It might be better for you if you stop talking about Elizabeth Warren.”
Would Warren’s wealth tax hurt the economy? A preliminary analysis by the Penn Wharton Budget Model found that a wealth tax similar to Warren’s would slow economic growth by nearly 0.2 percentage points a year over a decade, due in large part to a reduction in investment as wealthy people increase their consumption in response to higher taxes on savings.
“The wealth tax shrinks the economy because saving is more expensive,” Richard Prisinzano, Penn Wharton’s director of policy analysis, told Jim Tankersley of the New York Times. “The results also suggest that the negative effect of the tax increases as the tax rate increases.”
The analysis made some unusual assumptions, however, including the idea that the revenues from the wealth tax would be used to pay down the national debt, something Warren hasn’t proposed. That assumption actually improved the performance of the wealth tax in the Wharton model, though many economists would disagree on the implications for growth of debt reduction.
Further, critics say the Wharton analysis ignores one of the most significant features of Warren’s proposal, namely the big increase in public spending that could boost economic growth overall – another idea in economics that is subject to serious debate. “If the government collects $3 trillion in wealth tax revenue, and spends $3 trillion on public infrastructure, it’s unclear that there should be a reduction” in total investment in the economy, said Gabriel Zucman, the University of California at Berkeley economist who has advised Warren on her tax proposals.