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Sen. Warren Pushes Wealth Tax to Help Fund Biden Plan

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What You Need to Know

  • The Ultra-Millionaire Tax Act, Restoring the IRS Act and Real Corporate Profits Tax Act would help fund Biden's American Families Plan, Warren argues.
  • Warren has formally introduced all three proposals in the 117th Congress.
  • Critics of the wealth tax say it would be unworkable due to the difficulty of valuing some types of assets.

Sen. Elizabeth Warren, D-Mass., released a new report Thursday examining how three of her recent legislative proposals — including a wealth tax — will help pay for President Joe Biden’s $3.5 trillion tax and economic package that’s currently being debated in the House and Senate.

The new staff report, “The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It,” analyzes the effects of Warren’s legislation on nearly two dozen of the wealthiest Americans and richest corporations.

“It finds that simply by making these individuals and corporations pay their fair share, Congress could fund programs for healthcare, housing, childcare, and more in the infrastructure package presently being negotiated by House and Senate leaders,” the report states.

Congress, the report maintains, “has a historic opportunity to enact” all three of Warren’s proposals.

“The House and Senate are now considering vital legislation to invest $3.5 trillion in American workers and families in the form of childcare, Medicare and Medicaid, and climate change programs,” the report states, adding that Warren’s plans “would raise trillions of dollars to pay for critical investments while fixing a tax system riddled with loopholes and rigged for the rich.”

Warren has championed a wealth tax for some of the richest Americans, a tax on the profits reported to shareholders by the country’s most profitable companies, and expanding IRS enforcement to stop wealthy tax cheats and close the tax gap, the report states.

This year, Warren formally introduced all three proposals in the 117th Congress.

The Ultra-Millionaire Tax Act, S. 510, would create a 2% annual tax on wealth between $50 million and $1 billion and a 3% annual tax for wealth above $1 billion.

The legislation — introduced by Warren, alog with Reps. Pramila Jayapal and Brendan Boyle — is co-sponsored by Sens. Kirsten Gillibrand, Mazie Hirono, Ed Markey, Jeff Merkley, Alex Padilla, Bernie Sanders, Brian Schatz and Sheldon Whitehouse, in addition to 29 House members.

The tax, Warren maintains, would apply to the wealthiest 100,000 households in America and generate at least $3 trillion in revenue over the next decade.

Critics of the wealth tax say it would be unworkable due to the difficulty of valuing some types of assets. IRA and tax expert Ed Slott likened the measure to “an estate tax every year,” and longtime financial journalist Jane Bryant Quinn called the idea “nuts.”

The Restoring the IRS Act, S. 1788, would permanently fund the IRS with $31.5 billion in annual appropriations and “give the agency the tools it needs to stop wealthy taxpayers from hiding their income from the government,” the report states.

The Real Corporate Profits Tax, S. 2680, would create a 7% tax on corporate profits above $100 million. “It would close loopholes and require companies to pay taxes on the same profits that they report to investors, preventing companies from reporting massive profits to up their valuations and pulling a bait and switch come tax time,” the report states.

“This is an issue that President Biden understands and has prioritized; in fact, he campaigned on a book income tax and included one in his American Jobs Plan,” the report states.

The Real Corporate Profits Tax Act of 2021 would apply to companies “that report over $100 million in book income (approximately 1,300 public companies) and would generate nearly $700 billion in revenue over the next decade, according to the report.