Democratic Senators Bernie Sanders, Ed Markey and Kirsten Gillibrand have introduced a 60% tax on what they say was the “windfall wealth increase of billionaires” during the pandemic.
The reason for the levy? To pay for all out-of-pocket medical expenses for every person in America for a year.
The Make Billionaires Pay Act would tax the $731 billion in wealth accumulated by 467 billionaires—the richest 0.001% of America—a from March 18th until August 5th, a period in which the senators argue 5.4 million Americans lost their health insurance and 50 million applied for unemployment insurance.
However, the period noted by Sanders et al. covers the stock market rebound in which all investors, including billionaires, saw significant gains after steep pandemic-driven losses.
They add that the funds from this “emergency tax” would be used to cover all necessary healthcare expenses of the uninsured and underinsured, including prescription drugs, for one year.
“As a result of Trump’s tax giveaway to the rich, these billionaires currently pay a lower effective tax rate on average than teachers or truck drivers,” the senators claim.
Impact to richest Americans
The tax would still leave America’s billionaires with more than $310 billion in wealth gains during the worst economic downturn since the Great Depression. However, under the legislation:
- Jeff Bezos, the richest man in America, would pay a one-time wealth tax of $42.8 billion.
- Elon Musk would pay a one-time wealth tax of $27.5 billion.
- Mark Zuckerberg would pay a one-time wealth tax of $22.8 billion.
- The Walton family, the wealthiest family in America, would pay a one-time wealth tax of $12.9 billion.
Citing data from Americans for Tax Fairness and the Institute for Policy Studies, a tax of 60% on the windfall wealth gains among fewer than 500 billionaires from March until August would raise $421.7 billion—enough to empower Medicare to pay all of the out-of-pocket healthcare expenses for everyone in America over the next 12 months.
The wealth tax would remain in effect until January 1, 2021.
“The legislation I am introducing today will tax the obscene wealth gains billionaires have made during this extraordinary crisis to guarantee healthcare as a right to all for an entire year,” Sanders said in a statement. “At a time of enormous economic pain and suffering, we have a fundamental choice to make. We can continue to allow the very rich to get much richer while everyone else gets poorer and poorer. Or we can tax the winnings a handful of billionaires made during the pandemic to improve the health and well-being of tens of millions of Americans.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
