Representative Pramila Jayapal (D-WA) says her wealth tax proposal would “level the playing field” of the U.S. tax code by targeting wealth not subject to income or property taxes, reducing inequality that has been exacerbated by the coronavirus pandemic.
“As we’ve seen over Covid we have had this situation where $1.3 trillion in additional wealth has been given to the billionaires and at the same time we have people who are lining up at food banks around the country,” Jayapal said in an interview Tuesday with Bloomberg TV.
The Ultra-Millionaire Tax Act unveiled Monday by the Washington Democrat along with Senator Elizabeth Warren of Massachusetts and Representative Brendan Boyle of Pennsylvania has little chance of becoming law given Democrats’ narrow majorities in Congress.
The plan would create a 2% annual tax on households and trusts valued between $50 million and $1 billion. Net worth over $1 billion would be taxed at 3%. Jayapal, the head of the Congressional Progressive Caucus, said the measure would generate $3 trillion over the next 10 years.
“Imagine what we could do with $3 trillion,” Jayapal said. “We could fix our roads and bridges, we could invest in rural broadband, we could invest in childcare, we could invest in health care. There’s so many things that we could do with that money to really level the playing field.”
The wealth tax is unlikely to get support from Republicans and moderate Democrats. But the legislation sets down a marker for progressive goals in the future.
Jayapal said current income and real estate taxes that wealthy individuals pay are not enough, because their base salaries and properties only account for a portion of their wealth.
“The main thing is we want to level the playing field, because as you know we had a tax structure that has not really taxed wealth very much at all,” Jayapal said. “We don’t really tax wealth in most cases until someone passes away.”
—With assistance from Matt Shirley.
This article was provided by Bloomberg News.