Sen. Bernie Sanders, I-Vt., and Rep. Ro Khanna, D-Calif., announced new legislation on Monday designed to establish a wealth tax on American billionaires.
“At a time of unprecedented income and wealth inequality, this legislation demands that the billionaire class in America finally pay their fair share of taxes so that we can create an economy that works for all of us, not just the 1%,” Sanders said in a joint statement with Khanna.
The Make Billionaires Pay Their Fair Share Act would “establish” a 5% wealth tax on roughly 1,000 individuals in the country with a net worth exceeding $1 billion. Collectively, those individuals have a net worth of $8.2 trillion, according to the Sanders and Khanna. Sanders called billionaires the result of a “corrupt tax code.” According to an economic analysis from University of California, Berkeley. a 5% billionaire wealth tax could raise $4.4 trillion in federal revenues over the next decade.
“Enough is enough. Billionaires cannot have it all,” Sanders said.
Khanna said the tax is necessary to combat “extreme wealth” disparities in the country.
“We can tax billionaires a modest amount to make sure everyone has a fair chance while keeping our innovative engine,” he said.
Khanna and Sanders hope to use the revenue to fund a wide range of social programs. These include protection and expansions to Medicare and Medicaid, affordable housing construction and a guaranteed minimum salary of $60,000 for all American public school teachers.
One eye-catching proposal within the bill is a plan for “direct payments” to American citizens. The bill states that revenues from the wealth tax would “provide a $3,000 direct payment to every man, woman and child living in a household making $150,000 or less,” the cost of which is listed as $959 billion.
Sanders added that the tax on billionaires would still leave them with much of their wealth.
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“Elon Musk — worth $833 billion and now wealthier than the bottom 53% of American households combined — would owe $42 billion in taxes, leaving him with approximately $792 billion. Mark Zuckerberg, worth $220 billion, would owe $11 billion. Jeff Bezos, worth $218 billion, would owe approximately $11 billion,” the statement read.
If passed, the bill would not be the first wealth tax in the country’s history. The Revenue Act of 1935, signed into law by President Franklin D. Roosevelt, imposed a 75% tax on incomes over $1 million, though its success was limited.
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