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Wealth tax: Elizabeth Warren proposes a rise in “ ultra-millionaires ”
Massachusetts Senator Elizabeth Warren, Washington Rep. Pramila Jayapal and Pennsylvania Rep. Brendan Boyle want the ultra-rich to pay for it.

The three Democrats unveiled the ultra-millionaire tax law Monday morning. It would levy a 2% annual tax on household and trust equity between $ 50 million and $ 1 billion as well as an annual surtax of 1% on assets over $ 1 billion, for a global tax 3% on billionaires.

The controversial proposal, co-sponsored by Vermont Senator Bernie Sanders and others, is similar to what Warren put forward in 2019 as a Democratic primary candidate. Taxing the wealthy was the primary way Warren and Sanders fund their plans to expand health coverage, child care and other proposals when they were vying for the main nomination.

“As Congress makes 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 revenue it would generate,” Warren said in a statement. “This is money that should be invested in child care and early childhood education, K-12, infrastructure, which are all priorities for President Biden and Democrats in Congress.”

About 100,000 American families are said to be subject to the tax, which would bring in about $ 3 trillion over a decade, according to analysis provided by lawmakers. It was headed by Professors Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley, well known for their leftist work on income and wealth inequality.

The income estimate is higher than what they provided to Warren during the campaign in part because wealth at the top, especially among billionaires, has grown over the past two years and is expected to continue to rise, have they declared. Two years ago, they estimated it would bring in $ 2.75 trillion over a decade and affect 75,000 households.

Although the coronavirus triggered a severe economic recession in the United States, it has had a very disparate impact on American families. High-income households have largely kept their jobs through telecommuting, and stock market gains have increased their net worth. Those on the opposite end of the scale have been disproportionately hit by layoffs and have had a harder time finding new jobs during the so-called “K” recovery.

Taxing wealth, however, could be very difficult to do. One wonders if this is authorized by the American Constitution, legal scholars falling on both sides of the argument.

In addition, wealth taxes can be difficult to administer because the wealthy often have assets that are difficult to value.

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