WASHINGTON, D.C. — Sen. Elizabeth Warren and a group of other Democrats are introducing a bill that seeks to further tax the “ultra-rich,” or those who have a net worth over $50 million.
The lawmakers say the Ultra-Millionaire Tax Act would narrow the racial wealth gap by asking the wealthiest 100,000 households in the U.S. to “pay their fair share.” Those households represent the top .05%.
The bill would establish a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion. For those with a net worth above $1 billion, they’d face a 3% tax overall.
The Ultra-Millionaire Tax would bring in at least $3 trillion in revenue over 10 years without raising taxes on the 99.95% of American households that have net worth below $50 million, according an analysis from economists at the University of California-Berkeley.
Warren said in a press release that she believes the money brought in could be invested in child care and early education, K-12 and infrastructure, which are priorities of President Joe Biden and other Democrats.
"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. 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," wrote Warren. "As Congress develops additional plans to help our economy, the wealth tax should be at the top of the list to help pay for these plans because of the huge amounts of revenue it would generate.”
The legislation also includes anti-evasion and avoidance measures, including a $100 billion investment to rebuild and strengthen the IRS. The resources would reportedly be used to hire and train additional personnel, modernize IT systems, and implement the new asset valuation, reporting, and enforcement requirements for the tax act.
The bill would also establish a 30% minimum audit rate for taxpayers subject to the Ultra-Millionaire Tax, as well as a 40% "exit tax" on the net worth above $50 million of any U.S. citizen who renounces their citizenship in order to escape paying the tax.
"As working families struggle to put food on the table, keep the heat on, and pay the rent during this devastating economic crisis that has caused the poverty rate to jump by the largest amount in at least 60 years, the rich have only gotten richer and the wealth of billionaires has jumped by 40%," said bill co-author Rep. Pramila Jayapal. "The Ultra-Millionaire Tax Act will help level the playing field, narrow the racial wealth gap, ensure the wealthiest finally begin to pay their fair share, and invest trillions of dollars into our communities so we can make a real difference in the lives of people across America."
"The hyper concentration of wealth among a tiny number of multimillionaires and billionaires is a crisis for American capitalism and the American Dream," said bill co-author Rep. Brendan Boyle. "Wealth inequality is at its highest level since the Gilded Age. The wealth share of the richest 0.1% has nearly tripled since the late 1970s. It is time for the ultra-millionaires to pay their fair share so that critical government programs can be bolstered to help the everyday American. Our proposal will make a meaningful difference in the lives of Americans who need the most help and bolster our country's shrinking middle class."
The bill is co-sponsored by Sens. Bernie Sanders, Sheldon Whitehouse, Jeff Merkley, Kirsten Gillibrand, Brian Schatz, Edward J. Markey, and Mazie Hirono.