Today, U.S. Senator Kirsten Gillibrand announced legislation to create an ultra-millionaire tax on fortunes over $50 million. The bicameral Ultra-Millionaire Tax Act — led by U.S. Senator Elizabeth Warren (D-MA) and U.S. Representatives Pramila Jayapal (D-WA) and Representative Brendan Boyle (D-PA) — would build a fairer economy and help narrow the racial wealth gap by asking the wealthiest 100,000 households in America, or the top 0.05%, to pay their fair share. The legislation creates a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion and places an additional 1% annual surtax (3% tax overall) on the net worth of households and trusts above $1 billion. According to a 2021 analysis from the University of California-Berkeley, enacting the ultra-millionaire tax would bring in at least $3 trillion in revenue over 10 years, without raising taxes on the 99.95% of American households that have net worth below $50 million.
“This is simply about fairness in our tax system. The pandemic has highlighted how deeply flawed our economy is — while millions of Americans have slid into poverty and are struggling to make ends meet, a rigged economic system has helped the rich get richer,” said Senator Gillibrand. “Instead of giving the wealthiest few another tax break that hurts our economy, the Ultra-Millionaire Tax Act would ensure that ultra-millionaires in the top 0.1% finally paid their fair share and would create economic change and fairness that the overwhelming majority of Americans are demanding. Struggling American families and businesses are depending on us for a robust economic recovery, and this bill would help make this economy work for those truly in need.”
The Ultra-Millionaire Tax includes robust anti-evasion and avoidance measures, including:
- A $100 billion investment to rebuild and strengthen the IRS, ensuring the agency has the resources to hire and train additional personnel, modernize IT systems, and implement the new asset valuation, reporting, and enforcement requirements for the Ultra-Millionaire Tax
- A 30% minimum audit rate for taxpayers subject to the Ultra-Millionaire Tax
- A 40% “exit tax” on the net worth above $50 million of any U.S. citizen who renounces their citizenship in order to escape paying their fair share in taxes
- New tools to determine the value of hard-to-value assets, enabling the IRS to tighten and expand upon existing valuation rules
- Systematic third-party reporting that builds on existing tax information exchange agreements adopted after the Foreign Account Tax Compliance Act, and penalties for underpayment
A summary of the Ultra-Millionaire Tax Act can be found here.
Full text of the legislation can be found here.
A Data for Progress poll on wealth tax support can be found here.