Senator Warren revives US wealth tax, citing pandemic inequalities
WASHINGTON – US Senator Elizabeth Warren, a Democrat, plans to introduce legislation on Monday (March 1) that would tax the net worth of the wealthiest people in America, a proposal aimed at persuading President Joe Biden and other Democrats to fund sweeping new federal spending programmes by taxing the richest Americans.
Warren’s wealth tax would apply a 2 per cent tax to individual net worth – including the value of stocks, houses, boats and anything else a person owns, after subtracting out any debts – above US$50 million (S$66 million).
It would add an additional 1 per cent surcharge for net worth above US$1 billion.
The proposal, which mirrors the plan Warren unveiled while seeking the 2020 presidential nomination, is not among the top revenue-raisers that Democratic leaders are considering to help offset Biden’s campaign proposals to spend trillions of dollars on infrastructure, education, child care, clean energy deployment, health care and other domestic initiatives.
Unlike Warren, Biden pointedly did not endorse a wealth tax in the 2020 Democratic presidential primaries.
But Warren is pushing colleagues to pursue such a plan, which has gained popularity with the public as the richest Americans reap huge gains while 10 million Americans remain out of work as a result of the pandemic.
Polls have consistently shown Warren’s proposal winning the support of more than 3 in 5 Americans, including a majority of Republican voters.
“A wealth tax is popular among voters on both sides for good reason: because they understand the system is rigged to benefit the wealthy and large corporations,” Warren said.
Biden did not propose any tax increases to offset the US$1.9 trillion economic aid package that he hopes to sign later this month.
Biden has said he will pay for long-term spending – as opposed to a temporary economic jolt – with tax increases on high earners and corporations.
Critics say the tax would be difficult for the federal government to calculate and enforce, that it would discourage investment and that it could be ruled unconstitutional by courts.
Warren has amassed letters of support from constitutional scholars who say the plan would pass muster.
Warren estimated her initial proposal during the 2020 campaign would, over a decade, raise US$2.75 trillion, which she proposed spending on education and child care.
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