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Jayapal and Warren Introduce Wealth Tax on Fortunes Over $50 Million

The Ultra-Millionaire Tax Act would bring in at least $3 trillion without raising taxes on 99.95% of American households. The legislation places a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion, and a 1% annual surtax — a 3% tax overall — on the net worth of households and trusts above $1 billion.

A fact sheet is available here and the legislation is available here.

WASHINGTON — U.S. Representative Pramila Jayapal (WA-07), Chair of the Congressional Progressive Caucus and a member of the House Budget Committee, joined U.S. Senator Elizabeth Warren (D-Mass.) and U.S. Representative Brendan Boyle (PA-02) today in introducing the Ultra-Millionaire Tax Act, which would level the playing field and narrow the racial wealth gap by asking the wealthiest 100,000 American households — the top 0.05% — to finally pay their fair share. 

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. It does this by placing a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion, and a 1% annual surtax — a 3% tax overall — on the net worth of households and trusts above $1 billion.

“As working families struggle to put food on the table, keep the heat on, and pay the rent during this devastating economic crisis that has caused the poverty rate to jump by the largest amount in at least 60 years, the rich have only gotten richer and the wealth of billionaires has jumped by 40%,” said Congresswoman Jayapal. “The Ultra-Millionaire Tax Act will help level the playing field, narrow the racial wealth gap, ensure the wealthiest finally begin to pay their fair share, and invest trillions of dollars into our communities so we can make a real difference in the lives of people across America.”

“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,” said Senator Warren. “As Congress develops 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 amounts of revenue it would generate. This is money that should be invested in child care and early education, K-12, infrastructure, all of which are priorities of President Biden and Democrats in Congress. I’m confident lawmakers will catch up to the overwhelming majority of Americans who are demanding more fairness, more change, and who believe it’s time for a wealth tax.”

“The hyper concentration of wealth among a tiny number of multimillionaires and billionaires is a crisis for American capitalism and the American Dream,” said Congressman Boyle. “Wealth inequality is at its highest level since the Gilded Age. The wealth share of the richest 0.1% has nearly tripled since the late 1970s. It is time for the ultra-millionaires to pay their fair share so that critical government programs can be bolstered to help the everyday American. Our proposal will make a meaningful difference in the lives of Americans who need the most help and bolster our country’s shrinking middle class.”

The Ultra-Millionaire Tax Act is cosponsored by U.S. Senators Bernie Sanders (I-Vt.), Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Kirsten Gillibrand (D-N.Y.), Brian Schatz (D-Hawaii), Edward J. Markey (D-Mass.), and Mazie Hirono (D-Hawaii.). The legislation is also cosponsored by U.S. Representatives Barbara Lee (CA-13), Eleanor Homes Norton (DC), Ilhan Omar (MN-05), Alexandria Ocasio-Cortez (NY-14), Cori Bush (MO-01), and Mark Takano (CA-41),

The Ultra-Millionaire Tax includes robust anti-evasion and avoidance measures, including:

  • A $100 billion investment to rebuild and strengthen the IRS, ensuring the agency has the resources to hire and train additional personnel, modernize IT systems, and implement the new asset valuation, reporting, and enforcement requirements for the Ultra-Millionaire Tax
  • A 30% minimum audit rate for taxpayers subject to the Ultra-Millionaire Tax
  • A 40% “exit tax” on the net worth above $50 million of any U.S. citizen who renounces their citizenship in order to escape paying their fair share in taxes
  • New tools to determine the value of hard-to-value assets, enabling the IRS to tighten and expand upon existing valuation rules
  • Systematic third-party reporting that builds on existing tax information exchange agreements adopted after the Foreign Account Tax Compliance Act, and penalties for underpayment

“Wealth at the top has boomed during the COVID crisis. Billionaires’ wealth has literally exploded while many Americans struggle with job and income loss. The ultra-millionaire wealth tax is the most direct and powerful tool to curb growing wealth concentration in the US and make sure the ultra-wealthy pay their fair share in taxes. It will also bring substantial and much needed tax revenue to address the many challenges the country is facing,” wrote Emmanuel Saez and Gabriel Zucman, economists from the University of California-Berkeley

The Ultra-Millionaire Tax Act has been endorsed by: Action Center on Race and the Economy, AFL-CIO, American Federation of State, County and Municipal Employees (AFSCME), Americans for Financial Reform, Americans for Tax Fairness, Center for Law and Social Policy, Climate Hawks Vote, Communications Workers of America, Data for Progress, Democracy for America, Jobs with Justice, Justice Democrats, Indivisible, Institute for Policy Studies – Program on Inequality, Liberation in a Generation, National Domestic Workers Alliance, People’s Action, Progressive Change Campaign Committee, Public Citizen, SEIU, Sunrise Movement, Take on Wall Street, Tax March, Unemployed Workers United, UNITE HERE, United for Respect, Working Families Party.

“Wall Street billionaires have escaped paying their fair share of taxes for decades, thanks to laws they themselves have had an outsize influence in shaping. This bill requiring the ultrarich to pay some tax on their wealth, which was too often accumulated through predatory business models that extracted wealth from workers and communities, is an important step forward for economic justice,” said Lisa Donner, executive director, Americans for Financial Reform.

“The Ultra-Millionaire Tax Act will narrow the country’s extraordinary wealth gap, raise trillions of dollars from the super-wealthy and help fund the recovery our nation so desperately needs. We’ve calculated that U.S. billionaires have increased their wealth by nearly 50 percent since the pandemic began while tens of millions of people have lost their jobs, can’t pay their rent, and go to bed hungry at night. We estimate the Ultra-Millionaire tax will raise $1.4 trillion from billionaires alone over the next 10 years; even more will be raised from the simply super-rich. That’s why this legislation is critical to creating a fair-share tax system,” said Frank Clemente, Executive Director, Americans for Tax Fairness.

“A tax on wealth above $50 million is very popular, and is even more popular when it funds priorities like child care, health care, and jobs in our communities. As President Biden calls for a Build Back Better plan that invests in American infrastructure and jobs, every senator should be proud to fund these investments by signing on to Senator Warren’s wealth tax legislation,” said Stephanie Taylor, PCCC co-founder.

“The pandemic has shone a harsh light on America’s staggering inequalities-the fortunes of the richest Americans are ballooning while huge swaths of America suffer. It’s time to level the playing field and passage of the Ultra-Millionaire Tax Act would be a monumental step toward addressing wealth inequality. 99.9% of Americans won’t owe an extra dime in taxes under this proposal while the super-rich who have benefitted from a rigged system will finally start paying their fair share in taxes,” said Susan Harley, managing director of Public Citizen’s Congress Watch division.

“The wealth tax introduced today by Senator Warren and Representatives Jayapal and Boyle would help narrow the racial wealth divide in this country, at the same time as it raises money to invest in caregiving for our youngest and oldest Americans, rebuilding infrastructure, and paying for high quality k-12 education and tuition-free public college. At this moment in our history, it would be reckless not to pursue a policy that supports both of these goals,” said Mandla Deskins of the Take on Wall Street campaign.

“Tax March started in a moment of national outrage at corruption and inequality, and has since grown into a national movement with a simple demand: Tax the rich. We’re proud to support Sen. Warren and the bill’s cosponsors as they fight to do exactly that. Right now, the American economy is at a crucial decision point between recovery and further disaster. To revive America’s middle and working classes again, safeguard the country from future collapse, and build a new economy that truly works for everyone, Congress must tax the trillions of dollars in wealth hoarded by a few ultra-millionaires,” said Tax March Campaign Director Dana Bye.

“The Ultra-Millionaire Tax Act will capture a portion of the tremendous windfall that billionaires have reaped during the pandemic. It will both restore lost fairness and progressivity to the U.S. tax system and will also slow the build-up of democracy-distorting concentrations of wealth and power,” said Chuck Collins, Program on Inequality at the Institute for Policy Studies, and author of The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions. 

The fact sheet is available here.

The legislation is available here.

A revenue estimate by Emmanuel Saez and Gabriel Zucman is available here.