Penn Wharton Budget Model Scores Senator Warren’s Wealth Tax—Presidential Candidate’s Proposal Would Shrink Economy Between 0.9 and 2.1 percent by 2050

Printer Friendly Version

PHILADELPHIA, December 12, 2019 — Since Senator Elizabeth Warren announced her proposal to tax wealth, a few questions have arisen: How much money would these taxes actually raise? And how might a wealth tax affect the economy? Penn Wharton Budget Model (PWBM), the nonpartisan, independent applied research organization housed at the Wharton School of the University of Pennsylvania, has analyzed the budgetary and economic effects of Senator Warren’s most recent iteration of her wealth tax proposal, which imposes a 2 percent tax on net worth above $50 million and a 6 percent tax on net worth above $1 billion.

Through its analysis PWBM projects:

  • The proposed wealth tax will raise between $2.3 trillion and $2.7 trillion over ten years, roughly about $1.0 to $1.4 trillion less than the Warren campaign’s estimate.
  • The proposed wealth tax would shrink the economy between 0.9 and 2.1 percent by 2050, depending on how the additional tax revenue is spent.
  • Average hourly wages in the economy, including wages earned by households not directly subject to the wealth tax, are projected to fall between 0.8 and 2.3 percent due to the reduction in private capital formation.

These estimates are based on certain key assumptions, and an online interactive feature of the analysis allows readers to better understand the sensitivity of results to both the level of tax avoidance/evasion as well as the productivity of new spending funded by wealth tax revenues.

For more information, read the report: “Senator Elizabeth Warren’s Wealth Tax: Projected Budgetary and Economic Effects” or watch PWBM’s Wealth Tax Explainer Video.

Media inquiries: Contact Caroline Pennartz and Emily Hemming, Wharton Media Relations, (, +1 (215) 898-8036

About the Penn Wharton Budget Model

PWBM is a nonpartisan, independent applied research organization housed at the Wharton School of the University of Pennsylvania. PWBM works directly with policymakers and staff, serving as an honest broker by providing accurate, accessible and transparent economic analysis of the fiscal and economic impact of public policy – without advocacy. PWBM’s estimates are regularly referenced by policymakers and top news outlets. For more information, visit

 About the Wharton School

Founded in 1881 as the world’s first collegiate business school, the Wharton School of the University of Pennsylvania is shaping the future of business by incubating ideas, driving insights, and creating leaders who change the world. With a faculty of more than 235 renowned professors, Wharton has 5,000 undergraduate, MBA, executive MBA and doctoral students. Each year 13,000 professionals from around the world advance their careers through Wharton Executive Education’s individual, company-customized, and online programs. More than 99,000 Wharton alumni form a powerful global network of leaders who transform business every day. For more information, visit