The newest Biden administration appointee is a well-known professor who has said that the wealth tax touted by some liberal Democrats is not the best way to raise revenues.
The White House announced on Tuesday that Natasha Sarin, who worked as a professor at the University of Pennsylvania, will be joining the U.S. Treasury Department’s economic policy office as deputy assistant secretary for microeconomics.
Sarin, along with former Treasury Secretary Larry Summers, has pushed back publicly against economists who have claimed a U.S. wealth tax on high-earning individuals would generate trillions of dollars. The appointment comes as the Biden administration gears up for what might be the largest expansion of federal taxes since the early days of the Clinton administration.
While the 31-year-old has written in favor of targeting the wealthy for taxes, she and Summers have argued that a wealth tax is not the best way to do so and have branded the proposal — which was championed by liberal 2020 presidential candidate Sen. Elizabeth Warren — as “extreme” and “more radical” than their alternative revenue measures.
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The Biden administration has not ruled out a wealth tax. Treasury Secretary Janet Yellen said on Sunday that the wealth tax is “something that we haven’t decided yet, and can look at,” although she emphasized that President Biden has also proposed alternatives like higher corporate taxes and on high-earning individuals “that are similar in their impact to a wealth tax.”
Warren recently reenergized discussion about a wealth tax with her introduction of the “Ultra-Millionaire Tax Act” earlier this month. The Massachusetts Democrat’s plan, which was co-sponsored by socialist Sen. Bernie Sanders of Vermont among others, calls for a 2% annual tax on the net worth of households and trusts worth more than $50 million and a 3% annual overall tax on the net worth of households and trusts valued at more than $1 billion.
The lawmakers who support the act lean on the analysis of Emmanuel Saez and Gabriel Zucman, two University of California, Berkeley economists who claim the plan would raise $3 trillion over the next decade.
Sarin and Summers have sparred with Saez and Zucman over their predictions about how much a wealth tax would raise. In 2019, while Warren was on the campaign trail, Sarin and Summers hit back at the Berkeley economists’ prediction that such a tax would bring in $187 billion a year. A low-end estimate that Sarin and Summers provided in a Washington Post piece was a mere $25 billion per year, just about one-eighth of Saez and Zucman’s estimate.
And while Sarin and Summers have noted that they would be surprised if the $25 billion figure “was not a significant underestimate of the revenue potential” of a 2% wealth tax, they later said in another Washington Post article that the purpose of their first piece “was not to provide an alternative revenue estimate for the wealth tax but to call into question the naively high estimate provided by Saez and Zucman.”
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Sarin, who most recently taught both law and economics at University of Pennsylvania, studied at Yale for her bachelor’s degree and has both a law degree and a Ph.D. in economics from Harvard University. She has particularly focused her work on how improving tax compliance is key to raising revenues, according to the White House.
