By Chip Somodevilla/Getty Images.
When it comes to soaking the rich, 2019’s most prominent Democrats have entered a game of one-upmanship. After Alexandria Ocasio-Cortez floated a 70 percent tax on those with a net worth of $10 million-plus—an instant hit in polling—Elizabeth Warren released her own plan to levy a 2 percent yearly wealth tax on people making $50 million or more, ratcheting it up to 3 percent on billionaires. Not to be outdone, on Thursday, potential 2020 candidate Bernie Sanders unveiled his own play on class warfare, introducing the “For the 99.8% Act,” which would tax the estates of Americans who inherit more than $3.5 million, reinstate the 77 percent estate tax rate on wealth over $1 billion, and create several new tax brackets for millionaires.
According to Sanders, the plan would rake in $2.2 trillion in tax revenue from America’s current crop of living billionaires—slightly less than the $2.75 trillion Warren’s proposal projects. (In a press release, Sanders outlined the impact of his plan on several prominent billionaires: Jeff Bezos’s $131 billion, for instance, would be taxed $101 billion, compared to the $53 billion under current law.) It would also eliminate “dynasty trusts,” which protect assets passed down generationally for hundreds of years. “We need a tax system which asks the billionaire class to pay its fair share of taxes and which reduces the obscene level of wealth inequality in America,” Sanders said in a statement announcing the proposal, which comes after Senate Republicans introduced a measure earlier this week to repeal the estate tax altogether.
Before 2016, when Sanders made socialism chic and Donald Trump torched the political playbook, such a proposal would likely have been dead on arrival. But the national mood has changed somewhat in the Trump era. The stock market has been on a tear, but the benefits haven’t trickled down. Trump’s trillion-dollar corporate tax cut has largely failed to register with the middle class. And Democratic politicians have woken up to the reality that Barack Obama’s careful triangulation on entitlements, deficit spending, and corporate bailouts won’t fly with younger voters. And so re-distribution is back in vogue. A recent Pew report indicated that a whopping 84 percent of Democrats and Democratic-leaning voters believe the nation’s economy “unfairly favors powerful interests,” 69 percent believe this is due to “circumstances beyond a person’s control,” and 62 percent believe the wealthy “had greater advantages in life than most other people.”
Of course, there’s still room for political error—per the survey, a full 42 percent of all Americans, and 71 percent of Republicans, believe the rich earned their wealth “because they worked harder.” So potential Democratic 2020 hopefuls must still calibrate their messaging carefully as they plumb the heights of America’s top income brackets for new tax revenues. Kamala Harris and Cory Booker, for instance, have proposed expanding tax credits for the poor and middle class, as well as anti-poverty programs like rent relief and job guarantees, which appear more uplifting than punitive. Sanders and Warren, meanwhile, will test the proposition that nothing turns out the base like good old-fashioned economic outrage.
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