Sens. Elizabeth Warren and Bernie Sanders, each vying for the Democratic nomination for the 2020 election, both have versions of a wealth tax many believe are unconstitutional. And Rep. Alexandria Ocasio-Cortez, herself a Democratic Socialist who has endorsed Sanders’ campaign, admitted that even she thinks the taxes have no chance of becoming law — which goes to show how ridiculous they are in the first place.
“It’s not something that’s discussed a lot” in Congress, Ocasio-Cortez told Bloomberg last week. “I think there is a political will for it in the electorate, so it’s a matter of, will the more corporate-friendly wing of the party be down for it?”
Warren and Sanders are both campaigning on soak-the-rich schemes to pay for all sorts of giveaways, arguing their wealth taxes are the best way to raise trillions of dollars in revenue, rather than higher income taxes, to cut into the massive fortunes of people like those among the Forbes 400 list. The problem with higher income taxes is that most of the ultra-rich don’t actually earn a taxable income.
A study released this morning showed the Forbes 400 list more than doubled their wealth over the past decade while paying less of an effective tax rate.
Warren’s plan would tax assets above $50 million at 2% a year, and levy a 3% tax on assets above $1 billion, which she says will raise about $2.75 trillion over a decade. She also has floated the idea of doubling to 6% the tax on billionaires to help pay for Medicare for All.
Sanders’ wealth tax plan goes even further than Warren’s — effectively taxing billionaires at 97.5% — and would cut the wealth of billionaires in half in just 15 years, raising $4.35 trillion over a decade to pay for Medicare for All, affordable housing and universal childcare, among others. Sanders’ plan would place a 1% tax on wealth above $32 million for married couples that increases the higher the wealth goes (2% on $50 million to $250 million; 4% on $500 million to $1 billion; 5% on $1 billion to $2.5% billion and so on, all the way up to 8% on wealth above $10 billion).
And Ocasio-Cortez isn’t the only who says these plans have no chance of becoming law.
“If you’re asking about the wealth tax, no (it wouldn’t pass),” said Rep. Bill Pascrell, the senior Democrat on the House Ways and Means Committee, which would have to first draft and pass the tax.
House and Senate Democrats also are working on a number of bills that would raise tax revenue without a wealth tax, including a tax on stocks and bonds (which also would punish the middle class and people saving for retirement), surtaxes on income for millionaires and taxing investments every year before they’re even sold.
Ocasio-Cortez herself is working on alternative tax plans, including a $2 trillion plan that would raise the top tax rate all the way to 59%, practically doubling it from its current 37% rate, and another that would tax investments every year instead of when they’re sold.
