Sen. Elizabeth Warren (D-MA) on Tuesday reintroduced her 'Ultra-Millionaire' Tax Act, by which the government would confiscate 2% from households worth between $50 million and $1 billion, and 3% on households worth over $1 billion.
Reps. Pramila Jayapal (D-WA) and Brendan Boyle (D-PA) have introduced a companion bill in the House.
"As President Biden says, no one thinks it’s fair that Jeff Bezos gets enough tax loopholes that he pays at a lower rate than a public school teacher," Warren said in a statement. "All my bill is asking is that when you make it big, bigger than $50 million dollars, then on that next dollar, you pitch in two cents, so everyone else can have a chance."
While Warren insists that the bill would affect the wealthiest 100,000 households in the US - roughly 0.05% of the population, Democrats routinely lie to sell voters on their plans, and normalizing the confiscation of assets would obviously open the door to the consideration of confiscation among lower wealth brackets.
And give it to Ukraine?
— Not Jerome Powell (@alifarhat79) March 20, 2024
According to Fox News, Warren's bill contains additional rules to go after wealth head in trusts as part of a tax minimization strategy, and would give the IRS and additional $100 billion to fund auditing and enforcement efforts. 'Tax-and-spend' at its finest.
they could confiscate 100% of people’s wealth and still manage to spend more than that. government income isn’t the problem, it’s spending
— contango after dark (@semisimulacrum) March 20, 2024
Warren's proposal also includes a 40% "exit tax" on people worth $50 million or more who attempt to renounce their US citizenship to avoid paying the tax (which would obviously happen the moment this bill had a chance in hell of passing).
According to the Whatron Budget Model at the University of Pennsylvania, Warren's legislation would raise $2.7 trillion over a decade. The analysis also concluded that the wealth tax would reduce capital by 3.1%, slash average hourly wages by 1.2%, and reduce GDP by 1.2% in 2050.
"Smaller federal deficits translate into less crowding out and thus increased national saving and greater capital accumulation. However, wealthy households that face a tax on their savings choose to save less and thus accumulate less capital," the economists explained in 2021. "The net effect is a decline in the total capital stock of 1.4 percent in 2031 and 3.1 percent in 2050. This decline in capital in turn makes workers less productive, which is reflected by a decline in wages of 0.7 percent in 2031 and 1.2 percent in 2050. Lower private capital leads GDP to decline by 0.6 percent in 2031 and 1.2 percent in 2050."
Warren's plan has the support of five other 'Democratic' senators, as well as 27 House Democrats and Sen. Bernie Sanders (I-VT). The proposal follows a push by President Biden for higher taxes on businesses and the wealthy at his SOTU speech earlier this month.
"The way to make the tax code fair is to make big corporations and the very wealthy finally pay their share," Biden read off a teleprompter, asking Congress to raise the minimum corporate tax to 21%, and insisting that billionaires should pay a minimum tax of 25%.
In Nov. 2022, voters in Warren's home state of Massachusetts narrowly approved a 4% surtax on those making over $1 million - which the state's Department of Revenue estimates will generate $1.5 billion in revenue for the fiscal year ending this June.
Killing Jobs?
According to Dan Savickas, director of policy at the Taxpayers Protection Alliance, "It is clear that lawmakers at the highest levels of government fundamentally misunderstand what net worth actually means. Senator Warren’s proposal sets out to tax wealth as if net worth reflected cash in the bank. It paints a fictional ‘Scrooge McDuck’ image of these billionaires storing their own money in large swimming pools, just laying around."
According to Savickas, Warren's wealth tax would be on investments used by businesses to create jobs, helping the economy - and is not a tax on liquid assets that can easily just be paid to the government.
"A tax on wealth is a tax on gains that have not been realized. Innovators and investors cannot pay off something they don’t have. In order to comply with Senator Warren’s ridiculous scheme to boost her political profile, these businessmen and businesswomen will have to sell off these assets or shrink their operations," he said, adding "This will cost jobs, plainly and simply. This is as misguided an economic policy proposal as there is right now, and it is the working people Senator Warren purports to champion that will bear the brunt of the consequences."
