Wealth tax: Elizabeth Warren proposes hike on 'ultra-millionaires'
Category: News & Politics
Via: john-russell • 3 years ago • 16 commentsBy: Tami Luhby (MSN)
Massachusetts Sen. Elizabeth Warren, Washington Rep. Pramila Jayapal and Pennsylvania Rep. Brendan Boyle want the ultra-wealthy to pay for it.
The three Democrats unveiled the Ultra-Millionaire Tax Act on Monday morning. It would levy a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion as well as a 1% annual surtax on assets above $1 billion, for a 3% tax overall on billionaires.
The controversial proposal, which is co-sponsored by Vermont Sen. Bernie Sanders and others, is similar to the one Warren pitched in 2019 as a Democratic primary candidate. Taxing the rich served as a primary way for Warren and Sanders to fund their plans to expand health coverage, child care and other proposals when they were vying for the primary nomination.
"As Congress develops additional plans to help our economy, the wealth tax should be at the top of the list to help pay for these plans because of the huge amounts of revenue it would generate," Warren said in a statement. "This is money that should be invested in child care and early education, K-12, infrastructure, all of which are priorities of President Biden and Democrats in Congress."
About 100,000 American families would be subject to the tax, which would raise around $3 trillion over a decade, according to an analysis provided by the lawmakers. It was conducted by University of California Berkeley Professors Emmanuel Saez and Gabriel Zucman, who are well-known for their left-leaning work on income and wealth inequality.
The revenue estimate is higher than the one with which they provided Warren during the campaign in part because the wealth at the top, particularly among billionaires, has grown over the past two years and is expected to continue increasing, they said. Two years ago, they estimated it would raise $2.75 trillion over a decade and affect 75,000 households.
Though the coronavirus triggered a steep economic downturn in the US, it has had a very disparate impact on American families. Higher-income households have largely kept their jobs through telecommuting, and stock market gains have increased their net worth. Those at the opposite end of the scale have been hit disproportionately by layoffs and have had a harder time find new jobs during the so-called "K-shaped" recovery.
Taxing wealth, however, could be very difficult to do. There are questions about whether it is permitted by the US Constitution, with legal scholars falling on both sides of the argument.
Also, wealth taxes can be tough to administer since the rich often have assets that are hard to value.
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Although this is an entirely worthy idea, both logical and needed, the truth is such "radical" ideas as taxing wealth (other countries have taxed wealth throughout history dating back to the ancient world) such a proposal would need pretty broad support before Congress would consider it and the democrats would need more than a one vote margin in the Senate.
I'm sure the dems could get some Republicans to go along provided this wealth tax would prevent any and all tax increases on the middle class. No sneaky taxes on the middle class either, such as a "gasoline tax or an estate tax!"
Wouldn't it also have to get past SCOTUS? Like so many things constitutional, you can find "experts" who will defend either side of the question. I'm confident that if passed it would be challenged in court and end up in front of SCOTUS eventually.
What section of the Constitution prevents the congress from passing a "wealth tax?"
A wealth tax is a direct tax which needs to be apportioned. There is precedent with SCOTUS on income tax vs wealth tax.
The 16th Amendment applied to Income Tax
The above listed Forbes article came out early in the 2020 election when Warren pushed her ideas on a wealth tax. I'll admit I'm not a constitutional expert and must rely on others for such knowledge but it does seem there is precedent against a wealth tax in this country that would need to be settled. A wealth tax would not impact me directly as my wealth is not that great, but I believe there would be indirect impacts to everybody if this were to pass.
I feel a little dirty saying it, but I agree with you.
I do not agree with a wealth taxes, just for the sake of a wealth tax. But for this economy to recover, both small and middle sized businesses need help, as well as poverty and middle class people.
Taxes have been skewed for years to give the wealthy more tax breaks, allowing them to accrue wealth to an unheard of degree, it is time for them to help out the rest of the country at its time of need.
You may have a point with the rule on uniformity. It would seem that a "wealth tax" (as it is known in Socialist nations) is like a double tax, on money that has already been taxed when it was earned.
I have no empathy whatsoever for those currently considered the 1%.
That's good, because very very few of them have any empathy for the rest of us.
No, it's a dumb idea that would raise nowhere near the amounts that the idealistic Dems envision.
This is a no-brainer.
So a relatively painless tax - two or three percent is peanuts for the ultra-rich - would raise a trillion dollars over a decade. That would roughly compensate Trump's tax gift to the ultra-rich.
My opinion is... to double it!
the article says three trillion over a decade. still peanuts on a grand scale perhaps, but you gotta start somewhere.
Well of COURSE Warren and Sanders would be the ones proposing and supporting such nonsense.
Got to get the money for some of their social spending cravings!
what a wealth tax does is require those who have benefited most from the American system to give something back. Nothing wrong with the concept at all.
The wealthy already "give back", in fact, they pay the lion's share of income taxes collected.
Warren and Sanders can try to fleece them all they want, but I doubt SCOTUS will look favorably on their scheme to finance their pet projects.