One should expect a grown-up to evaluate costs and benefits, to understand tradeoffs, and to pay for what they propose. By that standard, Warren's big plans fail spectacularly. What Warren has done is engage in magic wand politics. Wouldn't it be great if college were free and everyone got subsidized child care? ) (No.) Wouldn't life be grand if everyone's rent were reduced by 10%? If wishes were horses...
Others have noted that her assumptions about how much revenue can be raised through a wealth tax are wildly optimistic. Ten European countries experimented with wealth taxes. Seven abandoned them after discovering that they don't work. And there are constitutional impediments in the U.S. Further, as my friend Josh Taifer, a California physician and day trader, points out, the level of government intrusion necessary to police a wealth tax would be unlike anything we've seen.
Our incomes and dividends are reported to the IRS. But a yearly 2% wealth tax would be a levy on everything. It would encourage the rich to put their assets into less traceable forms like gold, jewels, and art. Would IRS agents be rapping at their doors, demanding to see the contents of the home safe or, on a tip from a neighbor, hire a backhoe to dig up gold bars buried in the backyard? And what about fluctuations in value? How much is that Andy Warhol painting worth? Can we really know until we go to sell it? There's no Kelley Blue Book for paintings.
Warren breezes past these and other objections with indignant slogans about billionaire "freeloaders." That's an odd term. In 2016, the top 1% of earners took home 19.7% of national income. They also paid 37.3% of all taxes, which was more than the bottom 90% combined. If you want to raise (income) taxes on the rich, go ahead, but you will never extract enough to fund the spending Warren fondly imagines. The only way to achieve a Scandinavian-style welfare state is to do what the Scandinavians do — tax the heck out of the middle class.
Elizabeth Warren's approach is 1960s Great Society stuff. She would build public housing, throw money at the opioid epidemic, break up big tech companies, break up agribusiness firms, introduce a new corporate profits tax, and on and on. Implicit in every plan is the notion that the government is competent to spend money and run things for everyone's benefit. That worked so well the last time. As another friend, Sarah Longwell, observed recently, "Confidence in government is at its lowest ebb in years and yet so many Democrats and Republicans want to give it more responsibility."
One of Warren's proposals concerns maternal mortality and specifically the higher rates of death in childbirth among African Americans. Warren is sure she knows exactly why. "It comes down to one thing — prejudice." She says doctors and nurses don't listen to black women the way they do to white women.
I'm skeptical. In the first place, even if doctors are more dismissive of black women than others (and that is never acceptable), rarely will it be a matter of life and death. Second, obstetricians/gynecologists are about 62% female nationwide and more likely to be African American in major cities than elsewhere.
When Warren learned that black women are more than three times more likely to die in childbirth than white women — Hispanics have the lowest rate — she went straight to racism. But here are some other possibilities: Whereas infection was once the leading cause of death in childbirth, it is now more often underlying health issues like hypertension and diabetes that lead to heart problems. Black women are less likely than whites to have prenatal care.
They are also more likely to be obese (82% versus 63.5%). Obesity puts pregnant women at higher risk of a range of bad outcomes including heart attacks and strokes. According to the Office of Minority Health at HHS, African Americans are 20% less likely to engage in physical activity than whites. We know that being unmarried contributes to higher infant mortality. Could it also play a role in maternal mortality?
Warren proposes to fine hospitals if they don't bring down the number of maternal deaths among black women. What could possibly go wrong? Well, the hospitals may have no control over the things that are causing the disparity. Yet hospitals that serve large numbers of black women will lose funding — and who suffers then?