Elizabeth Warren ran her presidential campaign on a number of platforms (a plan for everything, after all) but one of her core ideas was the promise of implementing a “wealth tax” on American billionaires. Now that Warren is on the Senate Finance Committee, she’s back in a position to push for the tax.
Warren introduced that legislation Monday, which would apply a 2% tax to a person’s net worth, starting after the $50 million mark. So if a person is worth $50 million and one dollars, they pay just two cents, and two more cents for every dollar up to $1 billion, at which point, they have to start paying an extra penny per dollar. Back during her campaign, this proposal was enough to make some billionaires break down in actual tears.
The legislation is co-written by Pramila Jayapal, chair of the Congressional Progressive Caucus, and moderate Democrat Brendan F. Boyle. It’s overwhelmingly popular with voters, including Independents and Republicans.
A wealth tax differs from income tax in that it’s based on existing wealth, not what a person or company brings in. As we’ve seen time and time again, corporations and individuals with exorbitant wealth are experts at finding loopholes to avoid paying income tax. Amazon avoided paying taxes for years and it’s not even close to being alone in that. If Warren’s legislation passes, it could raise upwards of $100 billion a year.
Ever think about how unemployment is taxed but Amazon isn’t?
— Lauren Ashcraft ☀️ (@VoteAshcraft) February 25, 2021
According to the Americans for Tax Fairness and the Institute for Policy Studies Project on Inequality, the ten-year total revenue on Warren’s legislation would be about $1.4 trillion. And if you’re worried about those poor billionaires losing all their money, don’t. Their wealth would still continue to grow.
Washington state lawmakers are also reportedly considering their own 1% wealth tax, which makes sense given that four of the country’s top billionaires live in the state: Jeff Bezos, Bill Gates, MacKenzie Scott, and Steve Ballmer. Those four individuals combined would contribute more than $4 billion a year to the state’s revenue. But, as NBC News notes, any one of them could just up and move out of the state since they’re not involved in the day-to-day operations at any businesses in Washington, making a federal tax even more necessary.
As we’ve seen, the COVID-19 pandemic has only increased our economic divide, as those at the top keep getting richer while others sink further into debt and economic crisis.
“The ultra-rich and powerful have rigged the rules in their favor so much that the top 0.1% pay a lower effective tax rate than the bottom 99%, and billionaire wealth is 40% higher than before the COVID crisis began. A wealth tax is popular among voters on both sides for good reason: because they understand the system is rigged to benefit the wealthy and large corporations,” Warren said in a statement.
When asked if Joe Biden supports the wealth tax, White House Press Secretary Jen Psaki gave a tepid non-answer, just saying “The president strongly believes that the ultrawealthy and corporations need to start paying their fair share.” At the very least, that’s an acknowledgment that they don’t already do so.
Citing the need to invest in things like child care, education, and infrastructure, Warren said, “I’m confident lawmakers will catch up to the overwhelming majority of Americans who are demanding more fairness, more change, and who believe it’s time for a wealth tax.”
This pandemic has pushed working women—especially women of color—to the brink. Here’s one thing we’ve got to do: invest in universal child care. It is basic infrastructure to keep our economy running, like roads and bridges.https://t.co/PsTNkG2YWJ
— Elizabeth Warren (@ewarren) February 28, 2021
(via New York Times, CNN, image: Miller/Getty Images)
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