Single-payer decks business confidence---ruins the stock market and decks investor profits.

Third, the combined tax impact of Warren’s various plans is extreme. While the case for more tax progressivity is compelling, and each of the Warren measures can be defended in isolation, there is the concern that their cumulative impact may be excessive should, as the Warren campaign repeatedly claims, they be borne only by the very wealthy. Here is a suggestive comparison: The total after-tax adjusted gross income of all those earning more than $1 million or more, as last reported by the IRS in its Statistics of Income publication, was under $1.1 trillion. The sum of all the new taxes on the wealthy proposed by Warren is of comparable magnitude: adding together around $310 billion a year in new wealth taxes; $330 billion a year in corporate taxes from her new proposals and her previous real corporate profits taxes; $240 billion a year from her new capital gains and finance tax proposals; at least $90 billion from her across-the-board 14.8 percent taxes of labor and investment income; and $190 billion in increased compliance. This totals nearly $1.2 trillion — more than millionaires’ total after-tax income.

Of course, this calculation is an oversimplification. Different taxpayers are situated differently and will be affected differently by any set of proposals. There will be tax collections from those who are not middle class but still earn less than $1 million a year. There are sources of “income” that will be taxed under the Medicare-for-all proposal that do not show up in current adjusted gross income — unrealized capital gains or corporate retained earnings, for example. On the other hand, it’s highly problematic given the avoidance and other bad incentives likely to result, to be anywhere in the ballpark of confiscatory taxation of high-income taxpayers.

Finally, what of the economic and financial effects of Warren’s proposals? A place to start is by thinking about the potential impact on the stock market. The market is valued as investors’ claim on future corporate earnings, which the Bureau of Economic Analysis estimates are about $1.8 trillion this year. As a result of all the tax claims just described, the Warren program would reduce investors’ claim on these earnings. Recognizing that some of these taxes fall on salary income or non-corporate business, it is reasonable to estimate that investors will pay an extra $500 billion to $600 billion in taxes related to corporate profits. Then, Medicare-for-all proponents cite a severe hit to health industry profits, currently on track to be over $200 billion this year. Then, there will be the broader impacts of overhauling regulation, often to serve vital social interests, in initiatives such as banning fracking and reforming the energy industry, stepping up financial regulation, a major increase in antitrust enforcement and the regulation of technology companies, and filling corporate board seats with labor representatives. It is hard to see an argument that investors’ claim on profits would fall less than a third. The figure could be considerably greater.

Because of abnormally high valuations, along with increased uncertainty and volatility, loss of business confidence and selling pressure from those in distress, the market would likely fall more than proportionally to earnings. Accurate market predictions are impossible and will in any event depend not on what is proposed but on what the market expects will actually take place. There is, however, the real risk of economic contraction following a sharp market decline, especially given that the current very low level of interest rates puts the Fed in a weak position to pursue counter-cyclical policy.