Sanders unveils 'extreme' wealth tax proposal

Sen. Bernie SandersBernie SandersLongtime Rep. Lacy Clay defeated in Missouri Democratic primary Hillicon Valley: NSA warns of new security threats | Teen accused of Twitter hack pleads not guilty | Experts warn of mail-in voting misinformation Schiff, Khanna call for free masks for all Americans in coronavirus aid package MORE (I-Vt.) unveiled a wealth tax proposal on Tuesday that goes further than his Democratic presidential primary rival Elizabeth WarrenElizabeth WarrenTrump says government to review 5M Kodak loan deal Michelle Obama supporters urge Biden to pick former first lady as running mate On The Money: Unemployment debate sparks GOP divisions | Pandemic reveals flaws of unemployment insurance programs | Survey finds nearly one-third of rehired workers laid off again MORE's signature plan in hitting the rich with new taxes.

“At a time when millions of people are working 2 or 3 jobs to feed their families, the three wealthiest people in this country own more wealth than the bottom half of the American people,” Sanders said in announcing his plan.

“Enough is enough. We are going to take on the billionaire class, substantially reduce wealth inequality in America and stop our democracy from turning into a corrupt oligarchy,” he said. 

In a tweet on Tuesday touting the plan, Sanders said that "there should be no billionaires."


Sanders unveiled his plan at a time when Warren, Sanders's chief progressive rival for the nomination, is seeing momentum in the polls, including a survey this week from the Des Moines Register that found Sanders running in third place in the Iowa caucuses, behind Warren and former Vice President Joe BidenJoe BidenMark Kelly clinches Democratic Senate nod in Arizona Hillicon Valley: NSA warns of new security threats | Teen accused of Twitter hack pleads not guilty | Experts warn of mail-in voting misinformation Biden offers well wishes to Lebanon after deadly explosion MORE

Warren and Sanders have been battling for progressive voters and attention as they contend with Biden for the Democratic presidential nomination. A wealth tax has been one of Warren's signature proposals, with her supporters cheering it at rallies by chanting "two cents." She has touted it as a way to pay for her other plans.

The Sanders plan, which he touts as a "Tax on Extreme Wealth," would kick in at a lower threshold than his fellow senator's proposal, and would rise all the way to an 8 percent tax on married couples' wealth over $10 billion.  

Sanders's plan starts with a 1 percent tax on net worth above $32 million for married couples. The plan has eight tax brackets, with the highest being the 8-percent bracket. The brackets would be halved for single filers.
By contrast, Warren's proposed wealth tax only has two brackets: a rate of 2 percent tax for wealth valued at between $50 million and $1 billion, and a rate of 3 percent for net worth above $1 billion. Warren, a Democratic senator from Massachusetts, hasn't specified any differences for single filers and married couples.

Sanders's and Warren's plans match in imposing a 2 percent tax on wealth between $50 million and $250 million. 

University of California, Berkeley economists Emmanual Saez and Gabriel Zucman said in a letter that they estimate that Sanders's proposed wealth tax would raise $4.35 trillion over a decade and would "fully eliminate the gap between wealth growth for billionaires and wealth growth for the middle class." 

Sanders proposes using the revenue raised from his wealth tax to pay for his affordable-housing plan and universal child care, as well as to help fund "Medicare for All."

Democratic presidential candidates across the ideological spectrum have floated tax increases on the rich. But proposals to impose a new tax on wealth could face long odds in Congress, particularly if Republicans hold either chamber. 

Critics of wealth taxes have argued that they could be difficult to administer and enforce, and might be unconstitutional.

Sanders is proposing several mechanisms aimed at preventing wealthy people from avoiding the tax. These include the creation of a national wealth registry, a requirement that the IRS audit 30 percent of wealth tax returns filed by those in the 1 percent bracket and all returns filed by billionaires, and an exit tax for wealthy people seeking to give up their U.S. citizenship.

Sanders's campaign also argues that a wealth tax is constitutional, citing several articles written by legal experts.