A wealth tax should have been passed decades ago.
BY NAOMI JAGODA
The bill, called the Ultra-Millionaire Tax Act, would create an annual tax of 2 percent on the net worth of households and trusts between $50 million and $1 billion and a tax of 3 percent on net worth above $1 billion. The rate for net worth above $1 billion would increase to 6 percent if a “Medicare for All” health care plan is enacted.
The bill resembles a proposal that Warren released during her unsuccessful presidential campaign and frequently touted on the campaign trail.
“As Congress develops additional plans to help our economy, the wealth tax should be at the top of the list to help pay for these plans because of the huge amounts of revenue it would generate,” she said. “This is money that should be invested in child care and early education, K-12, infrastructure, all of which are priorities of President Biden and Democrats in Congress. I’m confident lawmakers will catch up to the overwhelming majority of Americans who are demanding more fairness, more change, and who believe it’s time for a wealth tax.”
During a press conference on Monday afternoon, Warren said that a wealth tax is particularly needed “because of the changes in this country under the pandemic.” She noted that billionaires have seen their wealth increase over the past year.”
Senator Warren introduced the bill along with my state’s Rep. Pramila Jayapal. Bernie was a co-sponsor.
This comes from just before the pandemic sent many industries into a tailspin, throwing many people out of work, while delivering a windfall to the ultra-wealthy.
JANUARY 9, 2020
The growth in income in recent decades has tilted to upper-income households. At the same time, the U.S. middle class, which once comprised the clear majority of Americans, is shrinking. Thus, a greater share of the nation’s aggregate income is now going to upper-income households and the share going to middle- and lower-income households is falling.9
The share of American adults who live in middle-income households has decreased from 61% in 1971 to 51% in 2019. This downsizing has proceeded slowly but surely since 1971, with each decade thereafter typically ending with a smaller share of adults living in middle-income households than at the beginning of the decade.
1971 is the year I graduated from High School. This squeeze on the Middle Class was the dominant feature of my whole working career.
Income growth has been most rapid for the top 5% of families
Even among higher-income families, the growth in income has favored those at the top. Since 1980, incomes have increased faster for the most affluent families – those in the top 5% – than for families in the income strata below them. This disparity in outcomes is less pronounced in the wake of the Great Recession but shows no signs of reversing.
From 1981 to 1990, the change in mean family income ranged from a loss of 0.1% annually for families in the lowest quintile (the bottom 20% of earners) to a gain of 2.1% annually for families in the highest quintile (the top 20%). The top 5% of families, who are part of the highest quintile, fared even better – their income increased at the rate of 3.2% annually from 1981 to 1990. Thus, the 1980s marked the beginning of a long and steady rise in income inequality.
Corporate America and their wealthy investors had working Americans in retreat for the next five decades.