Jeff Bezos, founder and CEO of Amazon, speaks with a group of Amazon employees who are veterans during an Amazon Veterans Day celebration on Monday, November 12, 2018.
Leonard Ortiz | First digital media | fake images
Jeff Bezos would owe $ 5.7 billion in taxes for 2020 under the Ultra Millionaire Tax Act proposed by a group of Senate and House Democrats on Monday.
Senator Elizabeth Warren, Democrat of Massachusetts; Sen. Bernie Sanders, I-Vt., And others unveiled their wealth tax proposal Monday, saying it would raise trillions in much-needed revenue and help reduce the divide of wealth that has only grown further during the pandemic. . The tax would be a 2% annual levy 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 in 10 years. He said the additional revenue would go to help pay for child care, educational infrastructure and clean energy. It is essentially the same tax that Warren championed during his campaign, when the slogan “two cents” became a popular rallying cry among supporters of the tax. Warren often argues that since the estate tax rate is 2%, “it’s only two cents on the dollar after $ 50 million.”
Accelerating the wealth gap
Warren said the tax is even more urgent during the Covid crisis as it has exposed and accelerated America’s wealth gap.
“We understand the direction we’ve been going. This pandemic has created more billionaires. The people at the top aren’t just holding on to their fingernails,” Warren said on CNBC’s “Squawk Box” on Tuesday.
Critics say the tax may not be constitutional and that the wealthy could easily fool it. Most European countries have abandoned wealth taxes because they raised less revenue than expected and were easily avoided by millionaires and billionaires.
“The lesson from other countries’ experiences with wealth taxes should serve as a warning that the United States should avoid adopting one in the first place,” said Erica York of the conservative Tax Foundation. “A wealth tax would be plagued with many administrative and compliance problems, as well as evasion and evasion problems. It would be a huge administrative challenge to implement, and it is not clear, even with more resources, that the IRS can collect a tax on the heritage efficiently “.
To combat tax evasion, the ultra-millionaire tax would provide $ 100 billion to the Internal Revenue Service for stricter enforcement. It would also include a 30% minimum audit fee for households with $ 50 million or more in assets, as well as new technology tools to help the IRS value hard-to-value assets like artwork or real estate. For those looking to move to another country and renounce their citizenship to avoid the tax, the proposal also includes a 40% “exit tax” for those trying to leave.
“The implementation part is a lot easier than it sounds,” Warren said. “We learned from some of the mistakes they made in Europe. This version of the estate tax covers all of your property. It doesn’t matter if it’s kept in stock or on real estate or on racehorses. Everything is covered, so it doesn’t make sense. in property movement. Plus, wherever you have it’s covered, whether you have it here in the US, whether you have it in the Cayman Islands. “
Billionaire tax bills
About half of the tax revenue would 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 Political Studies, Jeff Bezos, the richest person in the world, should owe $ 5.7 billion in 2020 under the Ultra-Millionaire tax. He would still have been left with a net worth of more than $ 185 billion after tax, according to the analysis.
Elon Musk would owe $ 4.6 billion in 2020 and would still have a fortune of over $ 148 billion at the end of the year. Bill Gates would have to pay $ 3.6 billion by 2020 and Mark Zuckerberg would have to pay $ 3 billion.
“The billionaires ‘wealth tax would fund nearly three-quarters of President Biden’s total $ 1.9 trillion pandemic bailout package currently pending before the Senate,” said Chuck Collins, director of the Institute of Studies’ Program on Inequality. Politicians.