Jeff Bezos, the world’s richest person, would get socked with a $4.1 billion tax bill the first year under U.S. Senator Elizabeth Warren’s soon-to-be proposed wealth tax, based on his current net worth of $137.1 billion.
The Amazon.com Inc. founder and the other 174 Americans on the Bloomberg Billionaires Index, a ranking of the world’s 500 richest people, would collectively owe $61 billion.
Less than a month after announcing her decision to challenge President Donald Trump in 2020, Sen.Warren, (D-MA) has grabbed the spotlight again with her new progressive “wealth tax proposal” aimed squarely at America’s richest taxpayers.
Warren’s plan, which she announced on Twitter on Thursday, would levy a 2 percent tax on Americans with $50 million to $1 billion in assets. The tax rate would increase to 3 percent for Americans with assets above $1 billion.
The wealth tax is projected to apply to less than 0.1 percent of U.S. households, and would raise $2.75 trillion over 10 years, said Warren advisor Emmanuel Saez, a left-leaning economist affiliated with the University of California, Berkeley.
But that fact may provide little comfort for Bezos. Almost all his net worth is tied up in Amazon stock and $4.1 billion wealth tax could force him to sell shares. He currently has $2.5 billion of cash and other liquid assets, according to the Bloomberg wealth index’s net worth analysis. Bezos, 55, eventually may share the tax burden with his wife MacKenzie. The couple announced earlier this month that they plan to divorce.
As part of the plan, Warren also wants to crack down on wealthy tax evaders by boosting funding for the IRS. Americans worth $50 million or more who seek to duck the tax by renouncing their US citizenship would get slapped with a one-time tax penalty. To further increase compliance, Warren wants to require that higher numbers of taxpayers who pay the wealth tax be subject to annual IRS audits.
Warren's idea comes alongside what may become a deluge of progressive Democratic lawmakers' plans to raise taxes on the wealthiest Americans.
Freshman Rep. Alexandria Ocasio-Cortez's has proposed a 70 percent marginal rate on those with income above $10 million. The New York lawmaker said she wants to use the tax revenues to pay for ambitious policy goals—a “green new deal"--that take aim at reducing economic inequality and combatting the causes of climate change.
While Ocasio-Cortez's plan is a tax on income, Warren's proposal would tax wealth. In America, wealth inequality is greater than income inequality.
While the 1 percent of Americans with the highest incomes receive about 20 percent of the total income in the United States, the top 1 percent of wealth holders collectively own more than 40 percent of the nation's total wealth, according to a new report published Wednesday by the Institute on Taxation and Economic Policy, which argues for a wealth tax.