Explainer: Democrats Warren and Sanders want wealth tax; economists explain how it works

According to Emmanuel Saez and Gabriel Zucman, the University of California at Berkeley economists who developed that estimate, that is in part because the wealthiest American families declare only a small portion of their actual economic gains in any given year as income, while leaving the rest invested in stocks and other assets, to grow in value. Saez has been involved in a series of what are considered groundbreaking studies of U.S. income, inequality and economic mobility that involved both developing techniques to impute income based on holdings of wealth, and extensive access to U.S. Internal Revenue Service records. "The greatest injustice of the U.S. tax system today is its regressivity at the very top: billionaires in the top 400 pay less (relative to their true economic incomes) than the middle class," the economists wrote in a September paper https://brook.gs/2OWp9wx.