"Enough is enough. We are
going to take on the billionaire class, substantially reduce wealth inequality
in America, and stop our democracy from turning into a corrupt oligarchy."
To tackle "outrageous and
grotesque and immoral" levels of inequality in the United States, Sen.
Bernie Sanders on Tuesday proposed a new
wealth tax on the richest Americans that economists say would slash
the fortunes of billionaires in half over 15 years and raise an estimated $4.35
trillion in revenue during the first decade.
"I don't think that
billionaires should exist," Sanders, a 2020 Democratic presidential
candidate, told the New
York Times in an interview. "This proposal does not eliminate
billionaires, but it eliminates a lot of the wealth that billionaires have, and
I think that's exactly what we should be doing."
Sanders's "Tax on Extreme
Wealth" plan, detailed on the senator's campaign website, would create
a one percent tax on wealth between $32 and $50 million, with the rate
progressively increasing on richer Americans.
"A progressive wealth tax
is the most direct policy tool to curb the growing concentration of wealth in
the United States," economists Gabriel Zucman and Emanuel Saez wrote in a
letter analyzing Sanders's proposal. "Senator Sanders's very progressive
wealth tax on the top 0.1 percent wealthiest Americans is a crucial step in this
direction."
Sanders's website outlines the
framework of the tax plan:
1 percent tax on wealth from
$32 to $50 million;
2 percent on wealth from $50
to $250 million;
3 percent on wealth from $250
to $500 million;
4 percent on wealth from $500
to $1 billion;
5 percent on wealth from $1
billion to $2.5 billion;
6 percent on wealth from $2.5
billion to $5 billion;
7 percent on wealth from $5
billion to $10 billion;
8 percent on wealth over $10
billion.
"At a time when millions
of people are working two or three jobs to feed their families, the three
wealthiest people in this country own more wealth than the bottom half of the
American people," Sanders said in a statement. "Enough is enough. We
are going to take on the billionaire class, substantially reduce wealth
inequality in America, and stop our democracy from turning into a corrupt
oligarchy."
To prevent the rich from
evading the wealth tax, Sanders's plan would establish a number of oversight
and enforcement mechanisms, including:
Creating a national registry
and significant additional third-party reporting requirements;
Increasing IRS funding for
enforcement and requiring the IRS to perform an audit of 30 percent of wealth
tax returns for those in the one percent bracket and a 100 percent audit rate
for all billionaires;
Creating a 40 percent exit tax
on the net value of all assets under $1 billion and 60 percent over $1 billion
for all wealthy individual seeking to expatriate to avoid the tax; and
Making enhancements to the
international tax enforcement and anti-money laundering regime, including the
strengthening of the Foreign Account Tax Compliance Act.
On his website, Sanders said
the revenue raised from the wealth tax would be used to fund the senator's
other progressive policy proposals, such as Medicare for All and universal
childcare.
"Over the last 30 years,
the top 1 percent has seen a
$21 trillion increase in its wealth, while the bottom half of American
society has actually lost $900 billion in wealth," the senator said.
"In other words, there has been a massive transfer of wealth from those
who have too little to those who have too much."
"For the sake of our
democracy and working families all over America who are struggling
economically," Sanders added, "that has got to change."
Morris Pearl, chair of the
Patriotic Millionaires, applauded Sanders's wealth tax proposal in a statement
Tuesday, calling the plan a "welcome addition to our national tax
debate."
"The wealthiest people in
this country haven't been paying their fair share for a long time, and part of
that problem is because our tax code only taxes the wealthy based on how much
income they choose to take each year," said Pearl. "The very rich get
money not from earning it each year, but from spending wealth that they have
already made."
"If our tax laws only
target one without touching the other, then rich folks like me will continue to
find ways to game the system and our inequality crisis will continue to get
worse," Pearl added. "We are thrilled to see this proposal and look
forward to more dialogue on this critical issue moving forward in the
debates."
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