Elizabeth Warren, Bernie Sanders propose 3% wealth tax on billionaires

  • Sen. Elizabeth Warren, Sen. Bernie Sanders and other Democrats on Monday proposed a 2% annual tax on wealth over $50 million, rising to 3% for wealth over $1 billion.
  • The Ultra-Millionaire Tax Act would aim to close the U.S. wealth gap, which has grown wider during the Covid pandemic.

A slew of Democrats on Capitol Hill — including progressives Sen. Elizabeth Warren, D-Mass., and Sen. Bernie Sanders, I-Vt. — on Monday proposed a 3% total annual tax on wealth exceeding $1 billion.

Mar 1, 2021: Senator Elizabeth Warren said her proposed wealth tax on households worth more than $50 million could help pay for investments in infrastructure, childcare and health reforms as part of President Joe Biden’s plan to “Build Back Better” after the coronavirus pandemic that has disproportionately hit low-income families.

They also called for a lesser, 2% annual wealth tax on the net worth of households and trusts ranging from $50 million to $1 billion.

The Ultra-Millionaire Tax Act aims at reining in a widening U.S. wealth gap, which has been exacerbated by the Covid pandemic.

“The ultra-rich and powerful have rigged the rules in their favor so much that the top 0.1% pay a lower effective tax rate than the bottom 99%, and billionaire wealth is 40% higher than before the Covid crisis began,” Warren said Monday in a statement.

About 100,000 Americans — or, fewer than 1 in 1,000 families — would be subject to a wealth tax in 2023, according to Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley.

The policy would raise at least $3 trillion over a decade, they found.

Dec 20, 2019: There’s a common myth about who pays their fair share, and who doesn’t.

Warren called for the tax revenues to be invested in child care and early education, K-12 education and infrastructure.

Aside from Warren and Sanders, other co-sponsors of the legislation include: Sens. Sheldon Whitehouse, D-R.I.; Jeff Merkley, D-Ore.; Kirsten Gillibrand, D-N.Y.; Brian Schatz, D-Hawaii; Edward Markey, D-Mass.; and Mazie Hirono, D-Hawaii. Reps. Pramila Jayapal, D-Wash.; and Brendan Boyle, D-Pa., are also co-sponsors.

The bill likely faces significant obstacles in the Senate, where Democrats hold the slimmest of majorities.

Some groups also forecast a wealth tax would have some negative effects.

A 2020 Tax Foundation analysis of separate Warren and Sanders wealth tax proposals during their presidential runs found they would reduce U.S. economic output by 0.37% and 0.43%, respectively, over the long term.

A wealth tax would also face administrative and compliance challenges, such as difficulty valuing assets and likely tax evasion schemes, according to the Tax Foundation.

The Ultra-Millionaire Tax Act would attempt to address some of these issues.

The legislation would invest $100 billion into IRS systems and personnel, ensure a 30% audit rate for the super wealthy, and impose a 40% exit tax on wealthy Americans who seek to renounce their citizenship to avoid a wealth tax.

https://www.cnbc.com/2021/03/01/elizabeth-warren-bernie-sanders-propose-3percent-wealth-tax-on-billionaires.html

Published by amongthefray

News with a historical perspective. Fighting against misinformation, hate, and revisionist history.

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