A group of Senate Democrats led by Sens. Elizabeth Warren (D-Massachusetts) and Bernie Sanders (I-Vermont) proposed an annual 3% tax on wealth exceeding $1 billion and a 2% annual tax on household wealth ranging from $50 million to $1 billion.
The tax, dubbed by Warren the Ultra-Millionaire Tax, aims at combating America’s growing wealth gap. “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,” said Warren in a statement Monday.
Warren calls for the revenue collected to be given to child care and K-12 public schools as well as infrastructure. The bill aims to invest $100 billion into the Internal Revenue System to guarantee a 30% audit rate on the ultra-wealthy. The legislation also plans to close a tax loophole in which ultra-wealthy people renounce their American citizenship to avoid American wealth taxes. The bill would impose a 40% exit tax on those ultra-wealthy who plan to renounce their citizenship.
Along with Sanders and Warren, the Ultra-Millionaire Tax is co-sponsored by six additional senators. With the Democrat’s razor-thin majority in the Senate, it is unclear if the sweeping, progressive bill could become law in its current form.
