Senator Bernie Sanders and Ro Khanna, a representative, on Monday introduced legislation that would impose a 5% annual wealth tax on America’s billionaires.
The proposal, titled the make billionaires pay their fair share act, would apply to individuals in the US with a net worth of $1bn or more, of which Sanders’s office estimates there are 938 people who meet that threshold.
In a news release on Monday, Sanders, the independent senator of Vermont, and Khanna, the Democratic representative of California who has recently gained national attention for his role in pushing the government to release files related to Jeffrey Epstein, said that an analysis by economists at the University of California, Berkeley, estimates that “the legislation would raise $4.4tn over the next decade”.
The lawmakers said that the revenue from the bill would be used to “improve the lives of the American people”.
“In its first year, the bill would provide a $3,000 direct payment to every man, woman and child in a household making $150,000 or less – $12,000 for a family of four – and use the estimated $4.4tn in revenue raised over the next decade to address the most pressing crises facing working families,” per the press release.
In addition, the lawmakers said that the bill would use revenue from the wealth tax to expand medicare to cover dental, vision and hearing for millions of seniors, build, rehabilitate and preserve over 7m affordable homes, and more.
The news release from Sanders’s office on Monday also named some well-known billionaires, including Elon Musk, who, according the lawmakers said would owe $42bn in taxes under this bill, “leaving him with approximately $792bn”.
Mark Zuckerberg, whom they estimate is worth $220bn, would owe $11bn, they said, while Jeff Bezos, valued at $218bn, would owe approximately $11bn.
And while the legislation is unlikely to become law given the current Republican control of Congress, the Washington Post reported the proposal could shape the Democratic party’s 2028 presidential primary, and potentially serve as a litmus test for candidates.
Meanwhile, in Khanna’s home state of California, a separate battle is now unfolding over a proposed ballot measure that would impose a one-time tax, equal to 5% of an individual’s assets, on California residents whose net worth exceeds $1.1bn. The revenue would be used for healthcare, education and food assistance in the state, per the proposal.
Supporters of the proposal must gather nearly 900,000 signatures to qualify the measure for the November ballot in California.
Gavin Newsom, California’s Democratic governor, who is widely seen as one of the Democratic party’s top contenders for 2028, has said he opposes the wealth tax and will “fight” it if it advances.
His spokesperson previously told the Guardian that Newsom has consistently opposed state-level wealth taxes, and the governor believes that “if implemented at a state-only level they drive a race to the bottom”.
Khanna, who has so far not ruled out a 2028 bid, has said that he backs the bill, but has also pushed for provisions in the bill that would allow startup founders “whose stock is locked or where their company is not profitable to defer any tax until a liquidity event with no interest accrual and for adjustment on the tax due based on the valuation at liquidity (in case it drops)”.
