Amazon Founder and CEO Jeff Bezos addresses a group of Amazon employees who are veterans during an Amazon Veterans Day celebration on Monday, November 12, 2018.
Leonard Ortiz | Digital First Media | Getty Images
Jeff Bezos is expected to $ 5.7 billion in taxes for 2020 under the Ultra-millionaire tax law proposed by a group of Senators and House Democrats on Monday.
Senator Elizabeth Warren, D-Mass .; Sen. Bernie Sanders, I-Vt., And others unveiled their wealth tax proposal on Monday, saying it would increase trillions of dollars in much-needed income and help narrow the wealth gap that no has only widened during the pandemic. The tax would be an annual levy of 2% on wealth over $ 50 million and 3% on wealth over $ 1 billion.
Warren said the tax would only affect the richest 100,000 American families – or the richest 0.05% – and would raise about $ 3 trillion over 10 years. She said the additional revenue would be used to fund child care services, educational infrastructure and clean energy. It is essentially the same tax that Warren defended during his campaign, when the slogan “two cents” became a popular rallying cry during his rallies among those who supported the tax. Warren often argues that since the wealth tax rate is 2%, “it’s only two cents for every dollar after $ 50 million.”
Acceleration of the wealth gap
Warren said the tax is even more urgent during the Covid crisis because it has exposed and accelerated America’s wealth gap.
“We understand the direction we have taken. This pandemic has created more billionaires. The people at the top are not barely hanging on to their fingernails.” Warren said Tuesday on CNBC’s “Squawk Box”.
Critics say the tax may not be constitutional and would be easily played by the rich. Most European countries ditched wealth taxes because they generated less income than expected and were easily avoided by millionaires and billionaires.
“The lesson learned from the experiences of other countries with wealth taxes should serve as a warning that the United States should avoid adopting one in the first place,” Erica York of the Tax Foundation told conservative trend. “A wealth tax would be plagued by many administrative and compliance issues as well as avoidance and fraud issues. It would be a huge administrative challenge to implement, and it is not clear even with more resources the IRS would be able to collect an effective wealth tax. “
To combat evasion, the Ultra-Millionaire tax would provide $ 100 billion to the Internal Revenue Service for stricter enforcement. It would also include a minimum audit rate of 30% for households with $ 50 million or more in assets, as well as new technological tools to help the IRS assess hard-to-value assets like art or l ‘immovable. For those who would seek to relocate to another country and renounce their citizenship to avoid the tax, the proposal also includes a 40% “exit tax” for those attempting to leave.
“The implementation part is really a lot easier than it looks,” said Warren. “We learned from some of the mistakes they made in Europe. This version of the wealth tax covers all of your property. It doesn’t matter if it’s held in stock, in real estate or in horses. Everything’s covered so there’s no point in moving property, so wherever you are it’s covered, whether you hold it here in the United States, whether you hold it in the Cayman Islands.
Billionaire tax bills
About half of the tax revenue is believed to come from billionaires, who Warren said had added more than $ 1 trillion to their wealth during the pandemic. According to calculations by the Institute for Policy Studies, Jeff Bezos, the richest person in the world, is expected to $ 5.7 billion in 2020 under the ultra-millionaire tax. He would still have ended up with a net worth of over $ 185 billion after tax, according to the analysis.
Elon Musk is expected to $ 4.6 billion in 2020, and is said to still have a fortune of over $ 148 billion at the end of the year. Bill Gates is expected to pay $ 3.6 billion for 2020 and Mark Zuckerberg is expected to pay $ 3 billion.
“The billionaire wealth tax alone would fund nearly three-quarters of President Biden’s $ 1.9 trillion pandemic rescue plan, currently pending before the Senate,” said Chuck Collins, director of the Institute for Policy Studies inequalities program.