Sen. Bernie Sanders (I-Vermont) on Monday will unveil new legislation that would raise $4.4 trillion in taxes from America’s roughly 1,000 billionaires.
The plan is a nonstarter in the current Republican-controlled Congress, but could become a litmus test for candidates in the 2028 Democratic presidential primary, much like Sanders’s Medicare-for-all plan was during the 2020 presidential cycle.
Sanders’s new legislation, which expands on his prior efforts to raise taxes on billionaires, calls for an annual 5 percent wealth tax on America’s billionaires. Revenue from the tax would be redirected to social spending programs, including $3,000 cash payments for Americans earning less than $150,000 per year, a $60,000 minimum salary for every public school teacher, and an expansion of Medicare to cover dental, vision and hearing care, among other measures.
“In a democratic society, we can no longer tolerate a rigged economy where so few have so much while so many have so little,” Sanders said in a statement. “This revenue would be used to substantially improve the lives of the American people and address some of the major crises facing working families.”
While Sanders, 84, is not expected to run for president for a third consecutive time, the proposal could prove divisive among Democrats who do run. California Gov. Gavin Newsom, widely viewed as a top Democratic presidential candidate, has objected to a billionaire tax currently being proposed in his state. Sanders’s proposal is being introduced alongside Rep. Ro Khanna (D-California), a co-chair of Sanders’s 2020 presidential campaign who supports California’s proposed billionaire tax — and who has been testing the waters of his own presidential bid.
The legislation comes amid a substantial increase in billionaire wealth during the first year of Trump’s presidency, driven by strong stock market gains. The total wealth of America’s billionaires rose last year by roughly 20 percent, or by about $1.5 billion, according to Americans for Tax Fairness, a left-leaning organization. Billionaires’ political influence has risen along with their economic clout.
Sanders argues that the measure is an essentially conservative compromise that would leave most billionaires’ fortunes intact. Tesla CEO Elon Musk’s holdings, according to estimates from Sanders’s office, would go from $833 billion to $792 billion. Meta CEO Mark Zuckerberg’s would go from $220 billion to $209 billion. Amazon founder Jeff Bezos’s would shrink from $218 billion to $207 billion. (Bezos also owns The Washington Post.)
The amount of revenue raised would be substantial, however, and in addition to the aforementioned initiatives, would be used to provide home health care to seniors and people with disabilities through Medicaid. It would also reverse the GOP’s Medicaid cuts. The $3,000 checks would apply per person for households earning under $150,000, which would amount to $12,000 for a family of four.
Sanders’s revenue estimates were provided by Emmanuel Saez and Gabriel Zucman, two economics professors at the University of California at Berkeley. The economists assume a 10 percent rate of “tax evasion/avoidance,” and argue that the existing “exit tax” for renouncing American citizenship would make doing so unattractive for the targeted billionaires.
The plan is unlikely to be backed by any Republicans, but its support even among Democrats, who have a range of opinions about taxing billionaires, remains unclear. During the party’s last contested presidential primary in 2020, several leading candidates embraced far-reaching ideas to restructure the American economy with new levies on the rich and major new spending programs. Those ideas fizzled in Congress under former president Joe Biden, who supported many of them but failed to persuade Sen. Joe Manchin III, then a Democrat from West Virginia, to go along with even a small fraction of what Sanders and many other Democrats called for.
The defeat of Biden’s ambitious “Build Back Better” agenda — which included many of the ideas Sanders is now attempting to revive — paved the way for passage of a smaller bill focused on climate and energy subsidies, after which Democrats lost control of both Congress and the White House.
Since then, the party’s policy agenda has been mostly up for grabs. Democrats appear largely unified on reversing the more than $1 trillion in cuts to Medicaid and food stamps approved by Trump and congressional Republicans as part of last year’s One Big Beautiful Bill. But the party’s priorities beyond that appear unclear. Sanders’s proposal attempts to provide one potential blueprint.
Newsom has been a prominent advocate for a different approach. The governor has warned that the wealth tax currently being pushed in California would hurt his state, driving companies to flee and suppressing the innovation that has helped make Silicon Valley among the richest regions in the world.
“This will be defeated — there’s no question in my mind,” Newsom said last month of the billionaire tax. “I’ll do what I have to do to protect the state.”
Other Democrats who are cautious about raising taxes on billionaires believe the party moved too far to the left during the 2020 Democratic presidential primary, alienating potential business allies and driving them into the Republican camp.
Sanders and Khanna have taken the other side of that debate, and last month Sanders held an event with Khanna in California at which both called for passage of the measure.
“The billionaire class no longer sees itself as part of American society,” Sanders said in Los Angeles last month. “They see themselves as something separate and apart, like the oligarchs of the 18th century, the kings and the queens and the czars, they believe they have the divine right to rule and are no longer subject to democratic governance.”
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