Warren Would Use Wealth Tax to Fund $800 Billion Education Plan -- Update

Date : 10/21/2019 @ 9:23PM
Source : Dow Jones News

Warren Would Use Wealth Tax to Fund $800 Billion Education Plan -- Update

By Joshua Jamerson 

WASHINGTON -- Sen. Elizabeth Warren is calling for $800 billion in additional federal funding for public education, a move that would exhaust the remaining revenue to be raised by her proposed wealth tax even as she seeks ways to finance Medicare for All.

Ms. Warren outlined on the blog site Medium an additional $450 billion in Title I funding to boost schools with low-income students, $200 billion in grants for students with disabilities and $100 billion in other grants over 10 years. She also vowed to invest $50 billion in school infrastructure on top of existing funding for school upgrades that are in some of her other policy proposals.

Other 2020 Democrats have unveiled education plans, as they and Ms. Warren look to appeal to teachers and the powerful unions representing them. Ms. Warren's proposals appeared the most detailed among the three Democratic candidates with the highest support in public polling.

Former Vice President Joe Biden has broadly pledged to increase federal funds for teacher pay, double the number of school mental-health professionals to ease the burden placed on teachers and fix a troubled federal debt-forgiveness program so teachers can more easily qualify to have their loans erased. Vermont Sen. Bernie Sanders made a moratorium on new charter schools, along with a ban on charters operated by for-profit companies, the centerpiece of an education platform he rolled out earlier this year. Mr. Sanders also called for tripling Title I funding and said that he would bolster support for special needs education.

For the Warren campaign, the education plan marks the final proposal to be paid for by her proposed wealth tax, which she frequently pitches to voters as a reservoir that could finance her progressive priorities. Now that it is exhausted, she will need to find new ways to raise revenue for other proposals -- something she has done before, as when she proposed a net investment income tax on high-income households to extend the life of Social Security.

For example, Ms. Warren previously said she would use the wealth tax to pay for a $100 billion opioids plan, the creation of a $7 billion small business equity fund, and a $20 billion election security plan. A Warren aide said those plans would now be paid for by closing a loophole in tax law on inherited assets. (The aide said the change was made because of Ms. Warren's desire to have all her education proposals covered by the wealth tax.)

By the campaign's estimate, revenue generated from the tax on inherited assets would fall about $27 billion short of what it would cost to finance those priorities for 10 years. A spokeswoman didn't immediately provide comment on that shortfall.

The Warren wealth tax is a proposed 2% annual levy on household wealth above $50 million and an additional 1% tax on wealth above $1 billion. It would affect about 75,000 households and raise between $2.6 trillion to $2.75 trillion over a decade, according to the economists who helped Ms. Warren develop her plan.

While Ms. Warren sees the tax as a tool to help alleviate inequality, critics say it would hurt the economy and that many wealthy Americans would find ways to avoid it. It would also face a steep path to passage in Congress.

In addition to the public education plan announced Monday, the wealth tax would pay for universal child care as well as a higher-education plan, which includes student-debt cancellation and tuition-free public college.

The full allocation of the proposed wealth-tax revenue comes as Ms. Warren faces pressure from her rivals to present a health-care plan. The senator said in Iowa over the weekend that she would soon release a plan with "the exact details" on how she would pay for a Medicare for All health-care system.

Though the wealth tax would finance much of Ms. Warren's platform, she hadn't pitched it on the campaign trail as a way to finance Medicare for All. Instead, she tacked closely to Mr. Sanders' proposed Medicare for All legislation.

Mr. Sanders has said taxes would go up to finance Medicare for All but the higher tax bill would be more than offset by decreased health-care costs. Ms. Warren has been less specific on how she would pay for a government-run health system, and when asked directly, she has avoided the question of whether the middle class would pay more in taxes -- something her rivals have pounced on. And some of her own most avid supporters say that they too want to hear more specifics.

Several of Ms. Warren's top aides have been calling health-care experts in recent weeks as her campaign examines revenue models to fund Medicare for All, The Wall Street Journal reported last week. The campaign has acknowledged that Ms. Warren has been looking at revenue streams to fund Medicare for All, but the senator's remarks Sunday in Iowa were the first time she has stated she was working on her own plan.

"Nothing's changed," Ms. Warren told reporters. "It's that I've been working for a long time on this question about what costs will be and how to pay for it. And I'm getting close. It's just got a little more work that it needs."

Write to Joshua Jamerson at joshua.jamerson@wsj.com

 

(END) Dow Jones Newswires

October 21, 2019 17:08 ET (21:08 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.