Democrats reintroduce ‘millionaire surcharge’ bill

Top line

Key facts

The invoice would apply an additional 10% tax to individual income in excess of $ 1 million and income of married couples in excess of $ 2 million.

The surcharge would apply equally to wages, for which the maximum tax rate is 37%, and investment income, including capital gains, for which taxes reach a maximum of 20% for long-term earnings. .

The legislation would increase federal revenue by $ 634 billion over 10 years and only affect the richest 0.2% of Americans. according to Estimates from the Fiscal Policy Center.

The invoice was introduced in the Senate by Senator Chris Van Hollen (D-Md.) and co-sponsored by Sens. Sherrod Brown (D-Ohio), Amy Klobuchar (D-Minn.) and Jeff Merkley (D-Ore.), and introduced in the House of Representatives by Rep. Don Beyer (D-Va.).

His. Brown set, “There is no reason why the richest people in the country should pay less taxes than the workers they employ,” adding that the richest citizens of the United States “will continue to exploit the loopholes” until they are closed.

Key Background:

The legislation was initially introduced in November 2019, but did not receive a vote and died in congress. On Tuesday, ProPublica published the results of an investigation based on more than 15 years of leaked confidential individual tax data from the Internal Revenue Service. ProPublica found that the 25 richest Americans paid a “real tax rate” below 3.5% between 2014 and 2018. That rate was much lower than that of the average American household, which paid about 14% annually in federal taxes and he was making about $ 70,000. ProPublica reported that Amazon founder Jeff Bezos paid a real tax rate below 1% despite a nearly $ 100 billion increase in his wealth between 2014 and 2018. Elon Musk, the CEO of Tesla, saw it grow his wealth at $ 13.9 billion during those four years and he paid a true tax rate of about 3.3%.

Tangent:

To fund his $ 1.8 billion American Family Plan, President Joe Biden proposed raising the income tax rate for wealthy households. from 37% to 39.6%, beginning in fiscal year 2022.

What to watch out for:

When the bill was first introduced in the 116th Congress, Republicans had a majority in the Senate and were opposed to repealing the tax cuts they had enacted in 2017. With Democrats now in control, the authors of the bill legislation expect a different result. It is worth noting that a 2020 Reuters / Ipsos survey found that 64% of Americans strongly or somewhat agreed that “the very rich should contribute an additional portion of their total wealth each year to support public programs.”

Crucial quote:

“The millionaire surcharge is a sensible plan to restore justice to the tax code, fight growing inequality, and fund important priorities for the American people.” Beyer said in a press release. “Republican tax cuts, as we feared, generated huge benefits for the wealthy. Our legislation would require the wealthiest to pay their fair share and help prevent tax evasion, which has been a huge problem in enforcing our tax code.”

Large number:

80%. That’s the percentage of U.S. tax revenue earned from the top 1% of the richest Americans in 1918, according to historian W. Elliot Brownlee.

Other readings:

IRS commissioner warns of prosecution if explosive tax records were illegally leaked to ProPublica (Forbes)

Secret IRS Files: A Treasury of Never-Before-Seen Records Reveals How the Richest Avoid Income Tax (ProPublica)

More than 50 large US corporations, including Nike and FedEx, did not pay federal taxes last year (Forbes)

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