As tax season is in full swingand the country is wondering how to move forward now that we have reached the debt ceilingmany people bring up the idea of ”wealth taxes” or “millionaire taxes”.
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Both relate to a similar idea. As the Tax Foundation explained, “A wealth tax is imposed on an individual’s net worth, or the market value of their total assets minus their liabilities. A wealth tax can be defined narrowly or broadly, and depending on the definition of wealth, the basis for a wealth tax can vary.
In the contemporary contextual case facing the United States, most proposed wealth taxes target wealthy individuals or corporations.
Who is for a wealth tax or a tax on millionaires?
As for those on the agenda, it is argued that taxing top earners more will ease the burden on middle-class workers — and result in a healthier economy. Additionally, the extra revenue could fund educational programs, housing subsidies and child care for middle and working class families, proponents say.
As CBS News reported, Democrats like President Joe Biden, Senator Elizabeth Warren and Independent Senator Bernie Sanders have been calling for a national wealth tax for years. However, they found little support in Congress (where Republicans are largely against tax increases). The Guardian reported that at the recent World Economic Forum in Davos there was talk of governments pushing wealth taxes to close the gap. But in America, with little traction at the federal level, many states have tried to seize the initiative.
Among them are Democratic-led territories like New York, Washington and California, as well as Connecticut, Hawaii, Illinois, Maryland and Minnesota. CBS reported that lawmakers in those states argued that “new wealth taxes are needed because quirks in the federal tax code allow multi-millionaires and billionaires to avoid paying their fair share.”
In fact, CBS cited a recent Oxfam report that claimed that the top 1% of earners in the United States had seen their net worth grow 19 times faster than the bottom half (economically speaking) of workers over the past few years. last 10 years.
California Congressman Alex Lee recently introduced a bill in the state legislature to create an “additional annual tax” of 1.5% on anyone with a net worth over $1 billion, to begin as early as 2024. Over time, the net worth threshold will drop to apply to those with a net worth of $50 million. If passed, the tax would also continue to apply to former California residents “even years after leaving the state and moving elsewhere,” according to FoxNews.
While it might seem intuitive that wealthy people would be widely opposed to similar measures, there are a number of millionaires and billionaires who have said they’re “taxing us, the ultra-rich, now” – among them actor Mark Ruffalo and Disney heiress Abigail Disney, who were among the top 200 earners who wrote a letter for the Davos committee, as previously reported by GOBankingRates. In the letter, the signatories said they wanted to be taxed more to help those struggling with the cost of living. This fits with the ideology set forth by a group of wealthy Americans called the Patriotic Millionaires:
“We seek to reform the political economy of our country so that it naturally generates greater economic and political equality, the prerequisites for a stable and prosperous nation,” the group said in a statement.
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This perspective perhaps aligns with the views of many Americans. According to CNBC, citing a 2020 Reuters poll64% of Americans – including 77% of Democrats and 53% of Republicans – agree with a wealth tax on the super-rich.
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This article originally appeared on GOBankingRates.com: Wealth taxes: Why advocates say millionaires should pay a ‘fair share’
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