Elizabeth Warren says the stock market has become a 'playground for the billionaires.' She's calling for a wealth tax to fix it.
Sen. Elizabeth Warren of Massachusetts stressed the need for a wealth tax to counter wealth inequality in the country during an interview on CNBC on Thursday.
Brought on to discuss the GameStop trade that shook the stock market in the last two weeks, Warren told CNBC's Wilfred Frost and Sara Eisen that the Securities and Exchange Commission needs stricter and clearer rules on market manipulation. Without them, she said the stock market is like a "casino" and is not reflective of the state of the economy. Warren also cited the importance of new stimulus checks.
"But the stock market, which has become the giant casino and playground for the billionaires, just keep spinning upward," Warren said. "That means that our real economy has ...really become detached from where the stock market is and the real economy right now is suffering. Stimulus checks are a way to deal with that."
With so many Americans filing unemployment claims during the pandemic, Warren said, and with a 20% unemployment rate for Americans making less than $40,000 a year, a two-cent wealth tax on the top tenth of one percent of families would counter wealth inequality and distribute some of the benefits of a soaring stock market.
Warren has long advocated for a wealth tax as a way to increase economic equality. According to the Institute for Policy Studies — a progressive think tank — the 400 richest families in America own more wealth than all Black households and a quarter of Latino households combined. When speaking of the consolidated wealth in the country, the Senator said that "a lot of the wealth is quite visible and easy to see, it's right there in the stock market."
She said: "A two-cent wealth tax changes this country fundamentally because it means we say as a nation, we are going to invest in the next generation. We're going to invest in creating opportunity not just for a handful at the top, we're going to create opportunity for all of our kids. That's how we build a strong future in this country."
Congress plans to hold hearings on the stock market following the drama around the GameStop trade this week.