2020 Democratic presidential candidate Bernie Sanders’s wealth tax proposal introduced Tuesday aims to raise $4.35 trillion over 10 years.
Sanders’s tax would be applied to accumulated wealth instead of just income, which would cut the average billionaire’s wealth in half in 15 years, The New York Times reported citing two economists who helped create the Vermont senator’s plan.
“Let me be very clear: As president of the United States, I will reduce the outrageous and grotesque and immoral level of income and wealth inequality,” Sanders told The NYT.
There should be no billionaires. We are going to tax their extreme wealth and invest in working people. Read the plan: https://t.co/RJDLvX5H4c
— Bernie Sanders (@BernieSanders) September 24, 2019
“What we are trying to do is demand and implement a policy which significantly reduces income and wealth inequality in America by telling the wealthiest families in this country they cannot have so much wealth,” he continued.
Sanders’s plan would implement an annual 1% tax on net worth over $32 million, and that percentage would increase by marginal rates until it reaches 8% on net worth over $10 billion. (RELATED: Bernie Sanders Explains Why He’s A Millionaire)
In other words, a 1% tax would be placed on a net worth of over $32 million, a 2% tax would be placed on a net worth of $50-to-$250 million, a 3% tax would be placed on a net worth of $50-to-$250 million and so on until the tax reaches 8% on a net worth of over $10 billion.
New @BernieSanders WEALTH TAX
• 1% tax on net worth >$32 million
• 2% from $50M to $250M
• 3% from $250M to $500M
• 4% from $500M to $1B
• 5% from $1B to $2.5B
• 6% from $2.5B to $5B
• 7% from $5B to $10B
• 8% on wealth over $10 billion
• Raises $4.35 trillion / decade
— Sahil Kapur (@sahilkapur) September 24, 2019
About 180,000 U.S. households that make upwards of $32 million, The NYT reported.
Sanders told The NYT he hopes “the day comes” when billionaires don’t exist.
“I don’t think that billionaires should exist,” Sanders told The NYT. “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.”
Fellow Democratic 2020 candidate Elizabeth Warren, a Massachusetts senator, proposed a similar “ultra-millionaire” wealth tax that would implement an annual 2% tax on a net worth over $50 million and a 3% tax on a net worth over $1 billion. Her proposal aims to o raise $2.6 trillion over 10 years.
The Supreme Court ruled that a wealth tax is unconstitutional in 1985 because it is a direct tax on personal property.
The American Bar Association, however, argues it is constitutional because “under the standards laid down by the Founders … apportionment of a wealth or land tax by population would now require the injustice of substantially higher tax rates in poorer states: when that happens, under the Founders’ standards, the tax is not a direct tax for which apportionment is required.”
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