Massachusetts Senator Elizabeth Warren suggested during the 2020 presidential campaign that a “Ultra Millionaire Tax‘, which would raise $3.75 trillion over 10 years. “Think about how that money could be used,” her campaign said. Vermont Senator Bernie Sanders upped the ante with his suggestion “Extreme Wealth Tax‘ which aimed to introduce a graduated wealth tax for billionaires.
Those campaign pledges included the data and vision of groups like Americans for Tax Fairness, Citizens for Tax Justice, the Institute for Policy Studies and Patriotic Millionaires, which have long advocated raising taxes on the rich to tackle economic inequality. They were healthy, economically and politically. They were popular too, as evidenced by the cheers the plans drew at rallies for Warren and Sanders and more Survey showing that the idea of taxing American oligarchs is very popular. But Warren and Sanders’ plans were quickly scrapped by Republicans and Democratic insiders, as well as the media elite who monitor the discourse to make sure the most privileged among us are not offended by what they read in the morning papers. To the extent that these insiders and media elites even considered raising taxes on the rich, they preferred “more”moderateFormer Vice President Joe Biden’s plan, which focused on capital gains and estate tax hikes.
Biden won the party’s nomination and the 2020 election. But, as we’ve seen over the past few months, so did the “tax the rich” policies that Warren and Sanders pushed. Slowly but surely, Biden and the Democrats have come to the idea that taxing billionaires is smart economics and very smart policy. Now, taxing extreme wealth isn’t just “on the table” — it’s in the budget.
President Biden has a “Billionaire Minimum Income Tax‘ which the White House argues will eliminate ‘inefficient income protection for decades or generations’. A White House fact sheet explains: “In 2021 alone, America’s 700+ billionaires saw $1 trillion in wealth, yet in a typical year, billionaires like these would pay only 8% of their total realized and unrealized income in taxes . A firefighter or teacher can pay double the tax rate.”
The proposal attempts to reflect this reality by requiring households with assets worth over $100 million to submit annual statements to the Internal Revenue Service on how those assets have increased. Billionaires and billionaires paying less than 20 percent of their winnings would have to write a check to the IRS to increase their payment rate to 20 percent.