Soaking the Rich--What's Triviial, What's Possible

I had an early response to Megan McArdle this morning--without doing a lot of work to reconstruct: she wrote that soaking billionaires as Sen. Warren now proposes as part of her financing of Medicare for All would contribute a "trivial" amount; I responded her definition of "trivial" must be different than mine.  Apparently (because I still don't understand Twitter fully) that became part of a bigger discussion.  Coming back to the exchange this afternoon, the points seem to be that billionaires may have between $2 and $3 trillion in wealth, and taxing them as Warren proposes would produce around 4 percent of the total cost. 

Meanwhile Kevin Drum has done a preliminary analysis of the proposal here.  It's a convenient summary but very preliminary.  Anyhow, over 10 years he shows total costs as $52 trillion, the contribution of a 6 percent tax on billionaires as $1 trillion.  That means a contribution of 2 percent of total, which would, I agree, qualify as "trivial".  (IMO 4 percent is a tad above "trivial".)

I should make it clear I'm as ambivalent about soaking the rich as I am about many things.  I've seen the reservations of many on the right, particularly about the difficulties in collection (bureaucratic efficiency is always a big consideration with me.)  But disregarding those issues, here's how I think of it today:

• I'm told I can withdraw 4 percent of my savings (TSP, IRA) each year and likely maintain my capital.  Anything over 4 percent is likely to cause to me to exhaust my savings.
• Based on that, it seems reasonable to hit billionaires with a 4 percent yearly tax--their fortunes wouldn't diminish, on average, and any especially productive or lucky entrepreneurs could increase them.
• Going over 4 percent is killing the goose--you can be decreasing inequality, which is good IMO, but you need to plan to get an alternative revenue source (or finding savings) for the long run.

My opinions are subject to change, particularly as Drum updates his analysis.