Senator Elizabeth Warren, D-Mass., Is holding a press conference to announce legislation that would tax the net worth of America’s wealthiest individuals in the Capitol on March 1, 2021 in Washington.
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A ton of Democrats on Capitol Hill – including progressives Senator Elizabeth Warren, D-Mass., And Senator Bernie Sanders, I-Vt. – proposed a total annual tax of 3% on assets in excess of $ 1 billion on Wednesday.
They also called for a 2% lower annual wealth tax on household and trust net worth, ranging from $ 50 million to $ 1 billion.
The Ultra-Millionaire Tax Act aims to close an ever-widening US wealth gap exacerbated by the Covid pandemic.
“The ultra-rich and powerful have edged the rules to their advantage so that the top 0.1% pay a lower effective tax rate than the bottom 99%, and the billionaire’s wealth is 40% higher than before the Covid crisis began,” Warren said. Wednesday in a statement.
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According to Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley, about 100,000 Americans – or less than 1 in 1,000 families – would be subject to wealth tax by 2023.
The policy would bring in at least $ 3 trillion in a decade, they found.
Warren called for tax revenues to be invested in childcare and early childhood education, K-12 education and infrastructure.
In addition to Warren and Sanders, there are other co-sponsors of the legislation: Sens. Sheldon Whitehouse, DR.I .; Jeff Merkley, D-Ore .; Kirsten Gillibrand, DN.Y .; Brian Schatz, D-Hawaii; Edward Markey, D-Mass .; and Mazie Hirono, D-Hawaii. Representatives Pramila Jayapal, D-Wash.; and Brendan Boyle, D-Pa., are also co-sponsors.
The bill is likely to face significant obstacles in the Senate, where Democrats have the smallest majority.
Some groups also predict that a wealth tax would have some negative effects.
A 2020 Tax Foundation analysis of separate wealth tax proposals from Warren and Sanders during their presidential election found that they would cut long-term U.S. economic output by 0.37% and 0.43%, respectively.
According to the Tax Foundation, a wealth tax would also face administrative and compliance issues, such as difficulties in valuing assets and likely tax evasion.
The Ultra-Millionaire Tax Act would attempt to address some of these concerns.
The legislation would invest $ 100 billion in IRS systems and personnel, guarantee a 30% audit rate for the super rich, and impose a 40% exit tax on wealthy Americans who want to renounce their citizenship to avoid a wealth tax.