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Don’t worry about this new proposed tax unless you’re worth $50 million or more

Elizabeth Warren wants some Americans to pay higher taxes, but not you. Here’s what to know.

Don’t worry about this new proposed tax unless you’re worth $50 million or more
[Photo: kvsan/iStock; rawpixel]
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If you’re an ultra-millionaire or a billionaire, you might have to reach for your checkbook soon.

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Democratic Senator Elizabeth Warren of Massachusetts has introduced a new bill that would require people she calls “ultra-millionaires” to pay more in taxes. Here are the details:

Would this be just for the super rich?

Yes. Think personal-trainers-whom-you-take-on-vacation-with-you versus YMCA memberships. She wants a 2% annual tax on households and trusts with net worths of $50 million and up and 3% on those above $1 billion.

Phew. That’s not me.

Correct. Warren and her cosponsors, six fellow Democrats and Independent Senator Bernie Sanders of Vermont, estimate that it will impact only the 100,000 wealthiest people in the United States, a.k.a. the top 0.05%.

What would the Ultra-Millionaire Tax Act accomplish?

The politicians proposing this in the Senate, along with Democratic Representative Brendan Boyle of Pennsylvania, cite research from the University of California-Berkeley saying it would add up to $3 trillion in revenue in the next decade. Doing this would mean that the rest of Americans wouldn’t have to see their taxes increased.

How does wealth disparity factor into this?

The gap between the rich and the poor continues to grow wider, and the pandemic made the contrast even starker. With 10.1 million Americans unemployed, according to the latest U.S. Department of Labor data, and millions of others underemployed or afraid of layoffs or furloughs, income disparities are only likely to get worse.

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“Billionaire wealth is 40% higher than before the COVID crisis began,” Warren said in a written statement. “A wealth tax is popular among voters on both sides for good reason: because they understand the system is rigged to benefit the wealthy and large corporations.”