To Unrig Economy, Dems Propose Raising Taxes on Wealth Over $50 Million

Weeks after U.S. President Joe Biden won applause from progressives for using his State of the Union address to go on the offense against the Republican Party's tax breaks for the wealthiest Americans, Democrats in Congress introduced legislation aimed at raising revenue by ensuring multimillionaires and billionaires pay their fair share.

Sen. Elizabeth Warren (D-Mass.) was originally joined by Reps. Pramila Jayapal (D-Wash.) and Brendan Boyle (D-Pa.) in 2021 to introduce the Ultra-Millionaire Tax Act, and the three lawmakers on Monday announced measures to strengthen the proposal.

The new legislation includes stronger anti-tax evasion rules regarding trusts, where "ultrawealthy" families frequently stash money to avoid paying taxes—costing the federal government $5 billion to $7 billion per year.

"As President Biden says: No one thinks it's fair that Jeff Bezos gets enough tax loopholes that he pays at a lower rate than a public school teacher," said Warren. "All my bill is asking is that when you make it big, bigger than $50 million dollars, then on that next dollar, you pitch in two cents, so everyone else can have a chance."

The lawmakers said the Ultra-Millionaire Tax Act would bring in at least $3 trillion over 10 years by requiring a 2 cent tax for every dollar of wealth over $50 million—affecting just the top 0.05% of households in the United States.

The bill includes a 3% tax on the wealthiest households overall, with a 1% annual surtax on the net worth of households and trusts over $1 billion.

Susan Harley, managing director of Public Citizen's Congress Watch division, said the three Democrats have zeroed in on "the only way to truly tackle the injustice of income inequality in this country... to address wealth hoarding."

"The Ultra-Millionaire Tax is a critically needed policy that would ensure that the super-rich who have benefited from a rigged system will begin to pay their fair share in taxes," said Harley.

Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley, have found that the richest 0.1% of Americans saw their share of the country's wealth triple from 7% to 20% from the late 1970s and 2019, while the bottom 90% saw their share "plummet from about 35% to 25%."

"For too long, the ultrawealthy in America have been able to dodge taxes on a large scale," said Saez and Zucman in response to the updated proposal. "As a result they often pay much less, relative to their ability to pay, than the rest of the population. The ultra-millionaire tax would address this fundamental unfairness, and raise critical revenues for much needed investments that would make the country—and us all—richer."

Boyle noted that he witnessed firsthand the loss of economic power among working Americans as the rich got richer in recent decades.

"As the son of a union household, I witnessed every day how incredibly hard my parents worked to build a middle-class life for our family. It is simply wrong that millions of hardworking families pay a higher tax rate than billionaires," said Boyle. "This legislation will fight back against Republicans' decadeslong scheme to rig our tax code against middle-class families and in favor of multimillionaires and billionaires."

The lawmakers introduced the proposal as economic justice advocates have recently cataloged price gouging and "shrinkflation" that's aimed at boosting shareholders' and CEOs' pay while working people struggle to afford necessities like diapers and groceries.

"The system is not working when the richest 1% of Americans own more than 30% of our nation's wealth but pay just 3.2% of their wealth in taxes while others pay twice as much," said Jayapal. "Our country's tax system needs urgent reform, and the Ultra-Millionaire Tax Act is a major step toward making sure the wealthy finally pay their fair share. With this legislation, we can narrow the racial wealth gap and invest trillions of dollars in schools, clean energy, housing, healthcare, and more to improve lives in communities across America."