Jeff Bezos would pay more than $ 5 billion a year under Warren’s income tax

Jeff Bezos owed $ 5.7 billion in taxes for 2020 under the Ultra-Millionaire Tax Act proposed by a group of Senate and Democrats in the House on Monday.

Sen. Elizabeth Warren, D-Mass.; Senator Bernie Sanders, I-Vt. And others announced their proposed wealth tax on Monday, saying it would increase trillions in much-needed revenue and help reduce the wealth divide that only increased during the pandemic. The tax would be an annual tax of 2% on wealth above $ 50 million and 3% on wealth above $ 1 billion.

Warren said the tax would affect only the wealthiest 100,000 American families – or the 0.05% wealthiest – and would raise about $ 3 trillion in 10 years. She said the additional revenue would go to help pay for childcare, 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 at his rallies among those who supported the tax. Warren often argues that, since the fortune tax rate is 2%, “it’s just two cents for every dollar after $ 50 million”.

Warren said the tax was even more urgent during the Covid crisis, as it exposed and accelerated the United States’ wealth gap.

“We understand the direction we are taking. This pandemic has created more billionaires. The people at the top are not badly holding onto their nails,” Warren said on CNBC’s “Squawk Box” on Tuesday.

Critics say the tax may not be constitutional and would be easily manipulated by the wealthy. Most European countries abandoned wealth taxes, as they generated 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 a tax in the first place,” said Erica York, of the conservative-minded Tax Foundation. “A fortune tax would be affected by many administrative and compliance issues, as well as evasion and evasion issues. It would be a huge administrative challenge to implement, and it is not clear, even with more resources, that the IRS would be able to raise a tax on wealth efficiently. “

To combat evasion, the Ultra-Millionaire tax would provide the IRS with $ 100 billion for stricter enforcement. It would also include a minimum audit fee of 30% for families with $ 50 million or more in assets, as well as new technology tools to help the IRS evaluate assets that are difficult to value, such as art or real estate. For those who would seek to move to another country and renounce citizenship to escape the tax, the proposal also includes a 40% “exit rate” for those who try to leave.

“The implementation part is actually a lot easier than it looks,” said Warren. “We learned from some of the mistakes they made in Europe. This version of the fortune tax covers all of their properties. It doesn’t matter if it’s in stock, in real estate or on racehorses. Everything is covered, so there’s no point in changing the In addition, wherever you keep it, it’s covered, whether here in the United States or in the Cayman Islands. “

About half of the tax revenue would come from billionaires, which Warren said added more than $ 1 trillion to his wealth during the pandemic. According to calculations by the Institute for Policy Studies, Jeff Bezos, the richest person in the world, owed $ 5.7 billion in 2020 with the ultra-millionaire tax. He would still have had a net worth of more than $ 185 billion after tax, according to the analysis.

Elon Musk owed $ 4.6 billion in 2020 and would still have a fortune of more than $ 148 billion at the end of the year. Bill Gates would have to pay $ 3.6 billion for 2020 and Mark Zuckerberg would have to pay $ 3 billion.

“The billionaires ‘wealth tax alone would finance nearly three-quarters of President Biden’s $ 1.9 trillion pandemic rescue package, currently pending in the Senate,” said Chuck Collins, director of the Institute for Gender Studies’ Inequality Program. Policies.