The Liberal Economists Behind the Wealth Tax Debate

“These things get sorted out over time,” Mr. Summers said in an interview, after praising Mr. Zucman and Mr. Saez for pushing the debate on inequality. “Most serious professionals in the tax policy area think that the polemical urge at some points has gotten the better of Gabriel and Emmanuel, especially when Gabriel starts to tweet.”

Other economists have challenged the details of Mr. Zucman and Mr. Saez’s wealth inequality calculations. They have engaged in a debate with the economists Matthew Smith, Eric Zwick and Owen Zidar, whose work shows a much smaller concentration of wealth among top earners. The competing study implies there is less for the government to gain by taxing the very wealthy.

And while candidates like Mr. Sanders support raising taxes on the wealthy by citing Mr. Zucman and Mr. Saez’s claim that the rich pay lower effective tax rates than poor and middle-class Americans, many liberal economists say the claim is wrong since the calculations do not include some tax benefits for the poor, like the earned-income tax credit.

“Leaving them out seems both analytically and politically mistaken,” said Jared Bernstein, a former top economist for Mr. Obama who counts himself a fan of Mr. Zucman and Mr. Saez.

Some economists have long been critical of Mr. Saez and Mr. Zucman’s work, including Wojciech Kopczuk, a Columbia University economist who published a rebuttal to the pair’s wealth data in 2015. But their rising public profile has brought more scrutiny. Mr. Kopczuk argues that, compared with their earlier work, the Berkeley economists’ recent book made more aggressive — and he believes incorrect — assumptions.

“That’s when you can say without any doubt they crossed from academic research to advocacy,” Mr. Kopczuk said. “It’s liberating when you don’t have to deal with reviewers.”

Mr. Saez and Mr. Zucman defend their methods as “conservative” estimates and note that the imposition of an American wealth tax would provide much more transparent evidence on wealth concentration.

“If we have the wealth tax data, we will see who is right,” Mr. Saez said. “If we’re wrong, fine. If it turns out there is no wealth concentration in the United States, we don’t need a wealth tax.”

Jim Tankersley reported from Berkeley, and Ben Casselman from New York.

Source link