- To pay for Biden’s social spending agenda, Democrats are considering a new tax targeting billionaires.
- Billionaires including Mark Cuban, Marc Benioff, Ray Dalio, and George Soros have publicly called for higher taxes on the wealthy.
- A wealth tax would make ultrawealthy Americans pay the government a small percentage of their net worth each year.
In 2020, Bill Gates’ New Year’s resolution was to get the federal government to raise taxes on the ultrawealthy – including himself. Now, that wish might come true, as Democrats eye higher taxes on America’s billionaires.
“We’ve updated our tax system before to keep up with changing times, and we need to do it again, starting with raising taxes on people like me,” Gates wrote on his blog at the time.
That’s exactly what Democrats are planning to propose this week. A plan authored by Sen. Ron Wyden would target the unrealized gains – value that assets like stock accrue – of billionaires every year. It’s not quite an outright wealth tax, but it comes close. And it would pay for the social safety net bill Democrats hope to vote on this week that includes expansions to healthcare and childcare for Americans.
While Elon Musk ripped the plan on Twitter, other billionaires from Warren Buffett to George Soros have proposed a wealth tax as a way to combat America’s growing wealth gap and fund healthcare and education initiatives. In the run-up to the 2020 presidential election, a group of 18 ultrawealthy Americans, including Abigail Disney and members of the Pritzker and Gund families, published an open letter asking presidential candidates to support a moderate wealth tax.
Politicians, too, rolled out proposals on this front: A wealth tax like the one proposed by Sen. Elizabeth Warren would make ultrawealthy Americans pay the federal government a small percentage of their net worth each year. Bernie Sanders unveiled a wealth-tax plan that is even more aggressive than Warren’s.
Inequality exacerbated by the pandemic has more strenuously renewed calls for a wealth tax, as America’s billionaires added $US2.1 ($AU3) trillion to their fortunes as millions dealt with with pandemic-induced unemployment and poverty. Mounting inequality isn’t a new issue: In 2018, income inequality in the US reached its highest level in more than half a century. The ultrawealthy actually paid a smaller portion of their income in taxes than average Americans in 2018, an analysis of tax data by the University of California at Berkeley’s Emmanuel Saez and Gabriel Zucman found.
While the idea of using a wealth tax to solve America’s inequality problem has gained traction in recent years, proposals have been hampered by questions over the effectiveness and the constitutionality of such a tax, Business Insider previously reported.
Keep reading to learn more about some of the most high-profile billionaires and multimillionaires who have publicly supported raising taxes on the 1%, listed in chronological order.
“That’s tax free. And I think it’s bullshit,” Liautaud told the Daily Beast.
When it comes to gains for assets, he said: “Warren Buffett or Bill Gates, every year this shit’s compounding. I paid more tax than Warren Buffett. And I’m worth 2 billion fucking dollars.”
—Mark Cuban (@mcuban) November 24, 2017
Now best known for his appearances on ABC’s “Shark Tank,” Cuban built a $US4.5 ($AU6) billion fortune through a lifetime of business deals, including the $US5 ($AU7).7 ($AU8) billion sale of Broadcast.com, and his ownership of the Dallas Mavericks, Business Insider reported.
In a December 30, 2019, post on his blog, Gates Notes, Gates proposed raising the estate tax and removing the cap on the amount of income subject to Medicare taxes. He also suggested closing the carried interest loophole that allows fund managers to pay lower capital gains rates on their incomes and making state and local taxes fairer, Market Insider’s Theron Mohamed previously reported.
“That’s why I’m for a tax system in which, if you have more money, you pay a higher percentage in taxes,” Gates wrote. “And I think the rich should pay more than they currently do, and that includes Melinda and me.”
Disney has a net worth of $US120 ($AU160) million, she said in July 2019. “The internet says I have half a billion dollars and I might have something close to that if I’d been investing aggressively,” Disney told the Financial Times.
Disney was one of 18 ultrawealthy Americas to sign an open letter in June asking presidential candidates to support a moderate wealth tax. The letter isn’t the first time that Disney has spoken out about tax reform. Disney criticized the 2017 Republican tax bill in a NowThis video, saying the bill unfairly benefited the wealthy.
Agnes Gund, 83, used the fortune she inherited from her father, the president of an Ohio-based bank, to become a philanthropist in arts and social justice, according to The New York Times. Agnes Gund received the National Medal of the Arts in 1997 from President Bill Clinton for her work, which included serving as the president of the Museum of Modern Art in New York.
Catherine Gund, 56, is an Emmy-winning film director and producer. Gund founded nonprofit production studio Aubin Pictures in 1996, according to her previous biography on the studio’s website.
In April 2021, Hughes told CNBC that Americans are “throwing out the idea that markets were ever free” and that it’s time for a new capitalism.
Eldridge is a political activist and former congressional candidate in New York, according to Vanity Fair. Eldridge was born in Canada.
Simmons, 44, serves as the cofounder and principal of impact investing firm Blue Haven Initiative alongside his wife and fellow signatory, Liesel Pritzker Simmons, according to the firm’s website. Simmons is the heir to a family fortune that stems from the construction of locks on the Erie Canal, according to Forbes.
Pritzker Simmons, an heir to the Pritzker family fortune, has a net worth of $US600 ($AU800) million, according to a 2013 Forbes article. Simmons, now 35, is also a cofounder and principal of Blue Haven Initiative.
As a child, she starred in several big-name Hollywood productions, including “A Little Princess” and “Air Force One,” alongside Harrison Ford. In 2002, Forbes reports, she sued her father and the Pritzker family and came away from it with a $US500 ($AU667) million payout.
Bowditch has previously advocated for raising taxes on the wealthy: In 2010, he signed an open letter to President Obama asking him to allow tax cuts for millionaires to expire, according to a CBS affiliate in Boston.
The philanthropist made his fortune running Quantum Fund, which was once the largest hedge fund in the world. Soros has a net worth of $US8.3 ($AU11) billion, Business Insider reported.
Business Insider’s Rich Feloni reported that Hanauer has said he’s not a billionaire, but that, as both he and his wife have signed The Giving Pledge, their combined net worth at least approaches the $US1 ($AU1) billion threshold.
Munger, 71, is the oldest daughter of Berkshire Hathaway vice chairman Charlie Munger. Munger is a Harvard Law graduate who works as a civil rights attorney in Pasadena, California, according to the Los Angeles Times. In 2012, she advocated for a tax hike in California to boost funding for the state’s public schools.
“It’s time to start talking seriously about a wealth tax,” Broad wrote in The Times. “I simply believe it’s time for those of us with great wealth to commit to reducing income inequality, starting with the demand to be taxed at a higher rate than everyone else.”
Broad built a $US6.9 ($AU9) billion fortune after cofounding home builder Kaufman & Broad, according to Forbes.
Benioff built a $US6.5 ($AU9) billion fortune after founding software developer Salesforce. Benioff currently serves as the company’s CEO.
As Politico reported, Bloomberg ultimately proposed a 5% surtax for people earning over $US5 ($AU7) million annually — as well as an increase to the capital gains rate and corporate tax rate. But Bloomberg said during his campaign that he believes that Warren and Sanders’ wealth tax “just doesn’t work,” he said at campaign stop in Phoenix in November.