What You Need to Know
- The Ultra-Millionaire Tax Act would levy a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion.
- The bill is highly unlikely to pass, Ed Slott says.
- A tax based on net worth would be difficult to implement.
Sen. Elizabeth Warren, D-Mass., unveiled early Monday the Ultra-Millionaire Tax Act, which would impose a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion.
The bill, introduced with Reps. Pramila Jayapal, D-Wash., and Brendan Boyle, D-Pa., “would level the playing field and narrow the racial wealth gap by asking the wealthiest 100,000 households in America, or the top 0.05%, to pay their fair share,” the lawmakers said Monday in a statement.
The lawmakers cite a 2021 analysis by economists Emmanuel Saez and Gabriel Zucman from the University of California, Berkeley, which found that the legislation would bring in at least $3 trillion in revenue over 10 years — without raising taxes on the 99.95% of American households that have net worth below $50 million.
The bill would also impose a 1% annual surtax (3% tax overall) on the net worth of households and trusts above $1 billion.
Co-sponsors of the bill are: Sens. Bernie Sanders, I-Vt.; Sheldon Whitehouse, D-R.I.; Jeff Merkley, D-Ore.; Kirsten Gillibrand, D-N.Y.; Brian Schatz, D-Hawaii; Edward Markey, D-Mass.; and Mazie Hirono, D-Hawaii.
“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 the statement.
“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.
‘An Estate Tax Every Year’
Ed Slott of Ed Slott & Co., told ThinkAdvisor Monday in an email that Warren’s wealth tax “will never happen.”