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.

The report quotes Warren’s tax advisors Saez and Gabriel Zucman, also a progressive economist affiliated with the University of California, Berkeley.

Expect to hear a lot from Saez and Zucman—the new media darlings of the progressive left—who published an article in the New York Times on Tuesday defending Ocasio-Cortez's proposal: “An extreme concentration of wealth means an extreme concentration of economic and political power. Although many policies can help address it, progressive income taxation is the fairest and most potent of them all," they wrote.

Of course, tax-the-rich policies are not a new clarion call from political candidates. Even Trump floated a wealth tax in 1999 as he explored a presidential bid as a Reform Party nominee. Trump's plan would have imposed a one-time 14.25 percent tax on individuals and trusts worth more than $10 million, newspapers at the time reported.

The announcement has not escaped the notice of affluent investors and executives, some of whom have been meeting this week at the World Economic Forum in Davos, Switzerland.

One Davos attendee Scott Minerd, global chief investment officer of $265 billion Guggenheim Partners, said he expects the tax proposals to “gain momentum” as we get closer to the 2020 elections.

Minerd is right. It’s highly unlikely that the divided Congress and complete paralysis that has seized the nation’s capital will be able to produce a new tax in the next two years. The real test of a wealth tax will come heading into 2020 when the race for the presidency and key House and Senate seats can decide the future of the American tax system for years to come.

Parts of this article were provided by Bloomberg News.