Massachusetts Sen. Elizabeth Warren and a group of progressive lawmakers introduced a bill that would impose a wealth tax on Americans who have more than $50 million in assets, CBS News reports.
Warren, Progressive Caucus Chairwoman Pramila Jayapal, and Pennsylvania Rep. Brendan Boyle introduced a bill that would impose a 2% tax on wealth between $50 million and $1 billion and an additional 1% surtax on assets over $1 billion.
"This is a wealth tax that has been needed for a long time. We need it to produce more revenue, to create more opportunity in American," Warren said. "But it is a wealth tax that we particularly need because of the changes in this country under the pandemic. We have watched the wealth of the billionaire class in America increase by more than a trillion dollars over the last year."
Key committee chairs co-sponsor:
The bill is one of Warren’s first moves as a new member of the Senate Finance Committee. Oregon Sen. Ron Wyden, the chair of the committee, has introduced his own plan that would raise taxes on investment income for Americans who earn over $1 million.
Warren’s bill is co-sponsored in the Senate by Budget Committee Chairman Bernie Sanders as well as Sens. Sheldon Whitehouse, Jeff Merkley, Kirsten Gillibrand, Brian Schatz, Ed Markey, and Mazie Hirono.
"Today the richest 1% own 75% of the nation's wealth and the richest 0.1% — that's zero-point-one percent — own more than 18% of America's wealth," said Jayapal, the bill’s lead sponsor in the House. "Then just compare that to the entire bottom half of Americans owning just 1.5% of wealth."
"I recognize that at some point we are going to have to turn to revenues. Well, here is a fair way to do it," added Boyle. "This is a hell of a lot better way to get revenue than taxing middle class and poor people in this country."
Bill unlikely to pass:
President Joe Biden did not support a wealth tax during his campaign and Treasury Secretary Janet Yellen warned last month that such a tax would be difficult to implement.
The bill would also need 60 votes to defeat a filibuster in the Senate and there is no Republican support for such legislation, not to mention that centrist Democrats are not likely to support the bill either.
"On the equity ground, on the tax burden ground, it can be very appealing. A large amount of money affecting relatively few taxpayers, all of whom are at the very top of the wealth distribution," Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center, told CBS News. "But it can have trickle-down effects in a negative way if it hurts the economy, if it hurts investment, and it may not have as strong an effect as desired by supporters because of ways to avoid and evade a tax."