US billionaires would have paid a combined $114 billion for 2020 under an “ultra-millionaire” tax that Sen. Elizabeth Warren of Massachusetts proposed on Monday, according to two tax groups.
The bill, called the Ultra-Millionaire Tax Act, would apply an annual 2% tax on individual net worth between $50 million and $1 billion. Individuals would owe an annual 3% tax on net worth above $1 billion.
Warren said that the tax would affect only about 100,000 American families and that the country’s billionaires would pay about half of the total tax amount.
The nation’s roughly 650 billionaires have a collective wealth of more than $4.2 trillion, Americans for Tax Fairness and the Institute for Policy Studies Project on Inequality said, basing their calculations on Forbes data. Their fortunes have increased by about 44% since March 2020, when the pandemic lockdowns in the US started, the groups said.
Based on the wealth of American billionaires at the end of 2020, over a decade the wealth tax on them alone would fund about three-quarters of President Joe Biden’s $1.9 trillion coronavirus relief package, the two groups said.
And about a third of the wealth tax would be paid by the 15 richest Americans, who combined have a fortune of more than $2.1 trillion, the groups said.
A separate analysis by the University of California at Berkeley, cited by Warren, estimated that the tax would generate $3 trillion in revenue over 10 years.
Warren proposed that the new federal money would be invested in programs such as childcare, education, and infrastructure.
Here’s what Jeff Bezos, Elon Musk, Bill Gates, and Mark Zuckerberg — the nation’s four richest people at the end of 2020, based on data from Forbes — would have paid for 2020 under the wealth tax proposal, according to the ATF and IPS’ calculations.
Jeff Bezos: $5.7 billion
The departing Amazon CEO would have paid $5.7 billion in wealth taxes for 2020, the ATF and IPS said. At the end of 2020, he had a fortune of $191.2 billion, per data from Forbes.
Washington legislators have also proposed a tax on the state’s billionaires. Bezos would pay almost $2 billion a year under this tax.
Elon Musk: $4.6 billion
Musk, the tech billionaire behind Tesla, SpaceX, Neuralink, and The Boring Company, would have paid $4.6 billion for 2020 under Warren’s proposal, the ATF and IPS said.
At the end of 2020, Musk’s real-time worth was $153.5 billion, after his wealth increased more than sixfold in 10 months, per Forbes data.
Bill Gates: $3.6 billion
Gates, who had a fortune of $120 billion by December, per Forbes, would have paid $3.6 billion in wealth taxes for the year, the ATF and IPS said.
Mark Zuckerberg: $3 billion
The Facebook CEO would have paid about $3 billion in wealth taxes for 2020, the ATF and IPS said. As the end of 2020, he was worth $99.9 billion, according to Forbes.
Momentum for a wealth tax has grown during the pandemic
An Oxfam report found billionaires’ wealth increased by $3.9 trillion from last March to December globally. The increase for the world’s 10 richest billionaires could pay for everyone to get vaccinated and stay out of poverty, Oxfam said. In the second half of 2020, meanwhile, 8 million Americans fell into poverty.
Oxfam suggested wealth taxes could be a good option to reverse this. In December, academics published a study of 50 years of tax cuts for the wealthy that suggested “trickle-down” economics made inequality worse and didn’t lead to economic growth and employment.
“Skyrocketing billionaire wealth in the midst of a health and economic crisis weighing down millions of Americans is one of the best reasons for enacting the Ultra-Millionaire Tax Act,” Frank Clemente, the executive director of Americans for Tax Fairness, said.
“This legislation will narrow the nation’s destabilizing wealth gap while raising trillions of dollars from billionaires and the other superrich.”
Argentina became the first country to respond to the pandemic with a one-off “millionaire tax.” Fewer than one in 100 earners will pay the tax, which the government hopes will raise $3.78 billion to help pay for its pandemic response.