The New York Times reports that Senator Elizabeth Warren is slated to propose a plan, aiming to enforce a yearly tax on America’s wealthiest families. With 75,000 households covered by this plan, Democrats intend to set a more even distribution of wealth through social programs expansion. According to Fortune, economist Emmanuel Saez, who advised Warren, revealed that this proposal will place a 2% rate on those with more than $50 million worth of assets, whilst those with over $1 billion will be taxed 3%.
Representative Alexandria Ocasio-Cortez is one of the supporters of this endeavour with a goal to raise the rates of marginal income tax for the society’s richest households. Ocasio-Cortez suggested imposing a 70% top rate on annual incomes beyond $10 million. According to Ocasio-Cortez, it is time for those in the higher tier of the economic ladder to start “contributing more” through “paying their fair share in taxes.”
According to Saez, less than 0.1% of the American household will be affected by this plan. Meanwhile, Bill Gates seems to be in agreement as he says that ultrawealthy individuals just like him should be contributing higher in taxes “significantly.” Gates states that he had paid more than $10 billion in taxes and that the same should be true for other people in a similar position.
What are the Effects?
In view of the goal to expand social programs, the proposal can procure up to $2.75 trillion within ten years. Proponents of this plan also aspire to prevent tax evasion cases through funnelling funds to the Internal Revenue Service. This can happen through obligating a number of people to undergo the wealth tax which will be audited yearly. For those with $50 million worth of assets who attempt to relinquish their US citizenship, they can expect to be charged a one-time tax penalty.
Supporters of the proposal expect conservatives to react negatively towards the plan.
Warren expressed her intentions to contend for the 2020 Democratic presidential bid and is set to announce the proposal in the near future.
