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Date TimeSeptember 24, 2019
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Bernie Sanders Proposes Wealth Tax That Would Cut Billionaires’ Net Worth in Half
(Bloomberg) -- Bernie Sanders on Tuesday unveiled a proposal for a wealth tax that takes Elizabeth Warren’s signature idea and pushes it even further, saying his goal is to cut American billionaires’ fortunes in half over 15 years.Sanders, who is struggling to maintain his top-three standing in the Democratic presidential primary campaign, announced the proposal while campaigning in Iowa counties that voted for Barack Obama in 2012 before switching to Donald Trump in 2016.Sanders’ “Extreme Wealth Tax” targets the top 0.1% of U.S. households and would raise an estimated $4.35 trillion over the next decade. The revenue would be used to pay for his programs like Medicare for All, universal child care and housing programs.A 1% tax for households with a net worth of more than $32 million for a married couple would increase to 2% for households worth $50 million to $250 million, 3% from $250 million to $500 million, 4% on $500 million to $1 billion. The tax would cap at 8% on wealth above $10 billion.Warren’s wealth tax begins with 2% on households worth $50 million or more.Sanders’ campaign said his wealth tax would slash U.S. billionaires’ wealth in half in 15 years, “which would substantially break up the concentration of wealth and power of this small privileged class.”“Enough is enough,” Sanders, a Vermont senator, said in a statement. “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.”To ensure the wealthiest Americans don’t evade the tax, the plans calls for the creation of a “national wealth registry” and “significant additional third-party reporting requirements.”The U.S. Internal Revenue Service would be required to perform audits of 30% of wealth tax returns for those in the 1% bracket and all billionaires’ wealth tax returns would be audited.For those who seek to leave the country to avoid the wealth tax, Sanders calls for a 40% exit levy on the net value of all assets of less than $1 billion and of 60% on assets greater than $1 billion.The plan would treat assets in a trust “as owned by the grantor of the trust (by the person giving assets to the trust) until that person’s death.”In January, before he announced his presidential run, Sanders proposed expanding the estate tax, calling for a rate of 45% tax on the value of estates between $3.5 million and $10 million. That rate would increase gradually to 77% for amounts more than $1 billion.Economists for the Sanders campaign estimate that had the wealth tax been enacted in 1982, the total wealth of the Forbes 400 richest Americans would be 40% of what it currently is, and they would have a net worth of $3 billion on average, instead of the average $7.2 billion they held last year.“The share of wealth owned by the Forbes 400 would not have exploded and would only be slightly higher than it was in the early 1980s,” say economists Gabriel Zucman and Emmanuel Saez who analyzed the proposal for the campaign and designed Warren’s tax plan. “The current top 15 wealthiest Americans would own $196 billion (instead of the $943 billion they own in 2018).”(Updates with polling in 2nd paragraph.)To contact the reporter on this story: Emma Kinery in Washington at ekinery@bloomberg.netTo contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Kevin WhitelawFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

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