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Elizabeth Warren on why we should tax the ultra-rich to fund education

Presidential candidate and Sen. Elizabeth Warren, D-Mass., defended two key planks of her economic platform in a PBS NewsHour interview Thursday, arguing that her campaign proposals on student debt relief and taxes would reduce inequality while addressing wealth disparities between whites and minorities.

Warren unveiled a plan last month that she said would cancel, in full, all of the student loan debt held by 75 percent of borrowers in the United States, and extend some student loan relief to millions of others. The plan drew praise but was also criticized for
focusing too little on students who are most in need of aid, including non-white students. Warren argued Thursday that her proposal would help close racial disparities.

“It’s specifically designed so that it helps close the black-white wealth gap,” Warren told NewsHour anchor and managing editor Judy Woodruff.

Warren added: “African American students are more likely to borrow money to go to college. They borrow more money while they’re in college. They have a harder time paying when they get out of college. My student loan debt cancellation helps them.”

Warren also touted her proposal to impose a tax on wealthier Americans that’s based on their net worth. The proposal calls for an annual 2 percent tax on households worth $50 million to $1 billion, and a 3 percent tax on households with a net worth of more than $1 billion. Critics have questioned whether such a wealth tax would discourage investment, but Warren said Thursday the concerns were misplaced.

“The idea that someone who has already amassed a huge fortune in this country is going to disinvest [that] just doesn’t even make any sense,” Warren said.

The Massachusetts Democrat also rejected the “anti-business” label Republicans have thrown at her over the years, saying it was “pro-business” to seek out robust rules and regulations to preserve competition and protect customers.

Read the Full Transcript

  • Judy Woodruff:

    With Mayor de Blasio's entrance today, there are now 23 Democrats vying for their party's presidential nomination.

    Among the first to jump in was Massachusetts Senator Elizabeth Warren, whose campaign since has put a heavy emphasis on plans and proposals in plenty of policy areas.

    Senator Warren joins us now.

    And welcome back to the "NewsHour."

  • Sen. Elizabeth Warren, D-Mass.:

    Thank you. It's good to be here.

  • Judy Woodruff:

    So, Senator, you have called yourself a capitalist to the bone.

  • Sen. Elizabeth Warren:

    Mm-hmm.

  • Judy Woodruff:

    And yet I think you and Senator Bernie Sanders have been seen by many as the two most left-leaning candidates in this race. He, on the one hand, says he's very proud to be a Democratic socialist.

    So, help people watching understand what the difference is between the two of you. How do they tell you apart? Why should they vote for you over him?

  • Sen. Elizabeth Warren:

    So, I can't speak for Bernie. Bernie will speak for himself.

    All I can do is tell you how I see it. And how I see it is that markets can produce enormous value, if they have rules. Markets, if they're properly functioning, if they're transparent, if they're level, that's an opportunity for entrepreneurs to get started, for competition to flourish, for there to be innovation to drive prices down.

    That's how it works. Now, there are some areas where markets don't work at all, what public education is about. We make an investment. Much of health care is about that.

    But there are many areas where what we want to see is markets that work better, markets that have curbs, that have rules, that create a level playing field, so that everybody has a chance to build some value and some security going forward.

  • Judy Woodruff:

    So, when you hear folks in the business community say — and we do hear this from time to time — saying, well, I think Elizabeth Warren, based on the fact that she went after the banks after the big financial collapse a decade ago, I think she's anti-business, what do you say to that?

  • Sen. Elizabeth Warren:

    Boy, they just have it backwards.

    You know, look, I think it is pro-business to say everybody has to follow the same set of rules, and that the giants don't get to come in and cheat everyone else, because, when they can do that, they not only stamp out their competition. They stamp out the people who follow the rules.

    They also manage to crush their own customers. And the consequence of that, we saw in 2008. Yes, they amassed a lot of wealth, and then they blew up the economy for everyone. That's why it is that we need consistent rules and we need those rules consistently enforced.

    And that's the difference we need in our economy now, not an economy that just works for the rich and the powerful, an economy that works for everyone.

  • Judy Woodruff:

    Well, let's talk about one of those ways that government — that you have suggested government can get involved.

  • Sen. Elizabeth Warren:

    Sure.

  • Judy Woodruff:

    Paying for college.

  • Sen. Elizabeth Warren:

    Yes.

  • Judy Woodruff:

    You have promised free public college, helping most student debt holders eliminate the debt.

    Now, we have looked at what some analysts are saying about this. They say, number one, it is giving bigger benefits to higher-income families than families at the lower end of the spectrum, the families who need it the most, which they say raises questions about fairness and about whether it's wasting government money.

  • Sen. Elizabeth Warren:

    Right now, we have an economy in the 21st century that basically says, you're going to need some post-high school training, whether it's technical school, two-year college, or four-year college.

    To get a chance to make it in America's middle class, to build some economic security, that's what you're going to need. Now, just remind yourself, a century ago, when that was true about high school, we made high school free for everybody, because we said it's an investment America makes in our young people, an investment in our future.

    So my plan here is to say, look, on the greatest fortunes in this country, those above $50 million, on the 50 millionth and first dollar, pitch in 2 cents. And if they would pitch in 2 cents, it would produce enough revenue to provide universal child care, universal pre-K, raise the wages of all of our child care and pre-K workers, and technical two-year college and four-year college for all of our kids at public institutions, and cancel student loan debt for about 95 percent of the kids who have got it.

    This is about…

  • Judy Woodruff:

    But what about the argument that it's helping the families who need it the least?

  • Sen. Elizabeth Warren:

    But it's not. No, but it's not.

    The families who need it the least are the one-tenth of 1 percent, who have the biggest fortunes in America. If they would pay just 2 cents, we could make this investment, not in some of our kids, but in all of our kids.

    And understand this about what's fair here. Those richest one-tenth of 1 percent, those biggest fortunes in America, about 75,000 people — or families, all in last year, they paid about 3.2 percent of their total wealth in taxes, all in.

    The 99 percent paid about 7.2 percent.

  • Judy Woodruff:

    Right.

  • Sen. Elizabeth Warren:

    They're already paying more.

    I just want to see a little more level playing field, where we make an investment in our kids going forward.

  • Judy Woodruff:

    I want to come back on the tax on the ultra wealthy.

  • Sen. Elizabeth Warren:

    Yes. Sure.

  • Judy Woodruff:

    Because we have looked at that as well.

  • Sen. Elizabeth Warren:

    Mm-hmm.

  • Judy Woodruff:

    Analysts have said, this is a plan that sounds good, but it could be, A, a disincentive to invest in what they call important transformative projects that could transform society, number two, that it would create massive and expensive investigations by the IRS, and, number three, it may not be constitutional.

  • Sen. Elizabeth Warren:

    Oh, please.

    I mean, the idea that someone who has already amassed a huge fortune in this country is going to disinvest over 2 cents, I mean, that just doesn't even make any sense.

    This proposal says — look, it's not punitive. It says, if you built one of the great fortunes in America — this is the one-tenth of 1 percent, more than $50 million — that 50th millionth and first dollar, you have got to pitch in 2 cents and for every dollar above that.

    And it says, in effect, if you built a great fortune, good for you — or inherited it — good for you, but understand that great fortune was built in part using employees all of us helped pay to educate, in part getting your goods and services to market on roads and bridges all of us help pay for.

    Right now, those biggest fortunes, they are putting in less than the rest of America. Let's just level that playing field a little bit.

  • Judy Woodruff:

    Question about foreign policy.

    The Middle East, we're waiting to see a more comprehensive plan from the Trump administration. But, in the meantime, would you have, as President Trump has done, endorsed this permanent annexation of the Golan Heights that Prime Minister Netanyahu has endorsed in Israel?

  • Sen. Elizabeth Warren:

    I think we have to think about what our ultimate goals are and what we should be urging.

    Israel has a right to its security. And the Palestinians have a right to dignity and to self-determination. I believe the best way that happens and what we have to do, as allies to both, is to push in the direction of bringing them both to the negotiating table, so that they make the decisions together about what happens in Israel.

  • Judy Woodruff:

    So, you…

    (CROSSTALK)

  • Sen. Elizabeth Warren:

    I believe the best way for that to happen is for the United States to push those parties.

    I think there is a real problem with us interfering in this way.

  • Judy Woodruff:

    So, that was a mistake, you're saying?

    (CROSSTALK)

  • Sen. Elizabeth Warren:

    I think it is a mistake.

  • Judy Woodruff:

    Last thing I want to ask is about what some voters are saying about Elizabeth Warren.

    There is a piece in the current "TIME" magazine quoting some voters saying they have reservations about supporting — I'm quoting — "another brainy woman for president," still smarting — evidently, they are — from Hillary Clinton in 2016.

    What do you say to them and to the woman — I'll tell you, I talked to a woman from Arizona yesterday. She said, I want to like Elizabeth Warren, but what she said to me was, she lectures too much. She said — in her public presentations, she said, I don't get the sense she's listening to voters like me.

    What do you say?

  • Sen. Elizabeth Warren:

    Look, I get out every chance I can and talk about where I came from.

    I grew up in Oklahoma. All three of my older brothers joined the military. That was their ticket to the middle class. When we were growing up, our daddy had a lot of different jobs.

    And I was a kid with a dream. I wanted to be a public schoolteacher. By the time I graduated from high school, my family didn't have the money for an application to send me to college, much less to pay for four years of college.

    And I was one of those kids. I got a scholarship. Yay! Then I fell in love at 19, got married and dropped out of school and thought I had lost it all.

    And then I found a commuter college about. It was about 45 minutes away. It cost $50 a semester. And for a price I could pay for on a part-time waitressing job, I had a chance to finish a four-year diploma and to realize my dream. I became a public schoolteacher. I was a special-needs teacher.

    And I probably would still be doing that work today, but, by the time I finished my first year, I was visibly pregnant, and the principal did what principals did back in those days.

  • Judy Woodruff:

    Is that…

  • Sen. Elizabeth Warren:

    He wished me luck, showed me the door, and hired someone else for the job.

    I have spent my whole life on the fundamental question of opportunity, how people get a chance. I got my chance, and I am so deeply grateful for it. I just want to see more and more of our kids get a chance.

  • Judy Woodruff:

    Is that Elizabeth Warren coming across in this campaign?

  • Sen. Elizabeth Warren:

    I tell the story of my life and why I'm in this fight.

    I'm probably the least likely person to end up running for president. I never thought this is what I would do. I have known what I wanted to do all my life. I wanted to be a teacher.

    But I have also been somebody out there who has advocated on the part of my students, on the part of everybody getting a chance. That's an America that we can build, and we can build it together.

    But it's going to take all of us to do this. The folks who have the power right now, the folks who have the money, the folks who have the lobbyists, man, they're going to make sure that they just keep tilting everything in this system to work a little better for them and a little better for them, you know, one regulation over here, one nomination over there.

    It just keeps money flowing to those at the top, and leaves everybody else struggling. We have chance to change that. That's what it means to be a democracy. We can do that. And that's what pulls me into this fight.

  • Judy Woodruff:

    Senator Elizabeth Warren, thank you.

  • Sen. Elizabeth Warren:

    Thank you. So good to be here.

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