“Ultra-Millionaire” Wealth Tax Bill – What You Need To Know

Sen. Elizabeth Warren (D-Mass.) on Monday introduced a bill in the Senate that would impose a new tax on the assets of America’s wealthiest individuals.

Why it matters: The plan, which Warren introduced along with Reps. Pramila Jayapal (D-Wash.) and Brendan Boyle (D-Pa.) is similar to a proposal that was the centerpiece of Warren’s campaign for the presidency in 2020.

  • Warren, a new member of the Senate Finance Committee, has long sought a tax increase on millionaires and billionaires in the U.S.

By the numbers: The bill would levy a 2% tax for people with a net worth between $50 million and $1 billion. Taxpayers with assets worth over $1 billion would be subject to a 3% tax.

  • The tax would not apply to people whose net worth is below $50 million.
  • The bill’s sponsors estimate that it would raise $2.75 trillion in tax revenue over a ten-year period.

What they’re saying: “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 stated in a news release.

  • “A wealth tax is popular among voters on both sides for good reason: because they understand the system is rigged to benefit the wealthy and large corporations.”

Where it stands: The measure is likely to fare better in the Democratically-controlled House than in the 50-50 Senate, where bills often need to receive 60 votes.

Deeper Dive:

Sen. Elizabeth Warren (D-Mass.) opened her 2020 campaign with a wealth tax policy proposal that was inspired by University of California-Berkeley economists Emmanuel Saez and Gabriel Zucman. The plan would tax the wealthiest Americans on their assets.

Key details

  • Annual 2% tax on assets above a taxpayer’s first $50 million, and 3% on assets that exceed $1 billion.
  • The wealth tax would raise an estimated $2.75 trillion over 10 years from 75,000 families.
  • Warren is branding it as the “Ultra-Millionaire Tax.”
  • To fight tax evasion, the policy would bolster the IRS budget, install a minimum audit rate for the very rich and add a 40% “exit tax” on the very rich who try to give up U.S. citizenship.
  • Warren has also proposed a universal child care program that would use revenues from the wealth tax to provide public and family-run centers to guarantee care from birth until schooling age.

Arguments in favor of Elizabeth Warren’s wealth tax

  • Addresses glaring wealth inequality.
  • Gets to the heart of people’s wealth: Assets instead of income.
  • Added source of government revenue for child care proposal and other programs.
  • Combats tax evasion.

Arguments opposed to Elizabeth Warren’s wealth tax

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