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.