60% Tax on Growth in Wealth of American Billionaires Since Mid-March Would Raise $422 Billion to Alleviate National Suffering
In a bold bid to share with the suffering American people a portion of the extraordinary wealth gained by the nation’s billionaires during the pandemic, Sen. Bernie Sanders (I-VT) today introduced legislation that would place a one-time 60% tax on the growth in billionaire wealth between March 18 and the end of the year. As of August 5, the tax would raise $422 billion although the figure will likely rise by Dec. 31.
Sanders would use the revenue to cover the out-of-pocket medical expenses of all the uninsured and the under-insured Medicare beneficiaries over the next 12 months during the COVID-19 crisis. The money raised by Sanders’s “Make Billionaires Pay Act” could also in theory be used for other vital public purposes (see list at bottom). Initial cosponsors of the bill are Senators Kirsten Gillibrand (D-NY) and Ed Markey (D-MA).
Based on an analysis by Americans for Tax Fairness and the Institute for Policy Studies using Forbes billionaires data, as of August 5th 467 of the country’s nearly 650 billionaires would be subject to the tax.* Their collective wealth has ballooned by $732 billion, or 30%, since the rough start of the coronavirus lockdown on March 18, or by $36.6 billion a week or $5.2 billion a day over the last 20 weeks. A 60% tax on their increased wealth under the Sanders legislation would raise $422 billion, but still leave them with $310 billion in wealth gains since mid-March.
Data on the amount each state’s billionaires would owe in taxes is available here.
This extraordinary growth in wealth occurred as 32 million Americans were receiving expanded unemployment benefits, nearly 5 million contracted the COVID-19 virus, and almost 160,000 died from it. Some 40 million families face eviction, but so far during the pandemic Jeff Bezos—already the world’s richest man—has gained over $71 billion in wealth, or 63%.
Long lines snake outside food banks as 26 million adults report going hungry, but so far during the pandemic Mark Zuckerberg’s fortune has jumped by $38 billion, or 69%. More than five million Americans have lost health insurance in the midst of a healthcare crisis, but so far during the pandemic Elon Musk’s net worth has nearly tripled thanks to a $46 billion boost.
“The multiple crises of 2020 have made clear that there are two Americas: the one most of us live in, currently battered by disease, recession and civil strife; and the privileged world of the ultra-rich, exemplified by the billionaires,” said Frank Clemente, executive director of Americans for Tax Fairness, which has been publicizing the divergent fates of billionaires and the rest of us. “The Make Billionaires Pay Act would draw those two America’s closer together by making billionaires share a sizable portion of their obscene growth in wealth during these troubled times. It’s only by acting together that we can emerge from our troubles stronger than ever.”
“An emergency wealth tax on billionaires is what the body politic requires,” said Chuck Collins, coauthor of Billionaire Bonanza 2020 and director of the Institute for Policy Studies – Program on Inequality. “These billionaires will remain billions richer than a year ago—and a portion of their extreme wealth gains will be deployed to address the pandemic crisis.”
No one worth less than a billion dollars would pay a cent under Sanders’s bill and billionaires who have lost money would be exempt. And even after paying the one-time tax, they would still be 40% richer than they were before the virus hit.
In addition to having Medicare pay the out-of-pocket healthcare expenses of the uninsured and underinsured over the next year, which one estimate says would cost $400 billion, the $422 billion Sanders’s bill would raise as of August 5 could also be put to other good uses, such as paying for the following items in the latest House-passed coronavirus relief bill, the Heroes Act:
- Nearly all of the $500 billion in aid that would go to help state governments keep providing public services or all of the $375 billion that would go sustain local public services.
- Expanded and extended unemployment benefits ($437 billion).
- Improved pandemic payouts of up to $6,000 per family ($413 billion).
- Both an initiative to save families from eviction and foreclosure ($202 billion) and one to provide hazard pay to frontline workers ($190 billion).
- All of the following: continued health coverage for laid-off workers ($98 billion); COVID-19 treatment ($90 billion); increased aid to schools and colleges ($90 billion); testing and contact tracing ($75 billion); and tax credits for employers and closed businesses ($73 billion).
* There are nearly 650 U.S. billionaires as of Aug. 5, according to Forbes data analyzed by ATF and IPS, but 176 of them currently would not have to pay the Sanders pandemic wealth tax because their wealth declined from March 18 to August 5, or they joined the billionaires list during that period but their wealth growth during the period did not exceed $1 billion, the threshold for newcomers to be assessed the tax because that is the minimum wealth to be placed on the Forbes list. March 18 is the date Forbes released its annual report on billionaires’ wealth.