Democrats are pitching a new wealth tax on billionaires to be used to send $3,000 payments to those making $150,000 or less, but the measure faces long odds in the Republican-controlled legislature.
U.S. Sen. Bernie Sanders, I-Vt., and Rep. Ro Khanna, D-Calif., introduced the Make Billionaires Pay Their Fair Share Act, which would establish a 5% annual wealth tax on U.S. billionaires.
Sanders and Khanna said the 938 billionaires in America are collectively worth $8.2 trillion. Two economists from the University of California at Berkeley, Emmanuel Saez and Gabriel Zucman, estimated the measure would raise about $4.4 trillion over a decade.
The bill would use the 5% annual wealth tax to send a $3,000 direct payment to every person in a household with an income of $150,000 or less. That’s $12,000 for a family of four. The rest of the money would be used for other spending. That includes reversing spending changes under the One Big Beautiful Bill Act; expanding Medicare; affordable housing; capping childcare costs; and establishing a $60,000 minimum annual salary for public school teachers.
Under the bill, Tesla boss Elon Musk would owe $42 billion in taxes, Meta boss Mark Zuckerberg would owe $11 billion and Amazon boss Jeff Bezos would owe about $11 billion, Sanders and Khanna said.
Kyle Pomerleau, a senior fellow at the American Enterprise Institute, said the $4.4 trillion estimate was overly optimistic.
“The revenue estimate is too high by nearly a factor of two,” he wrote in an analysis.
Pomerleau said the Berkley estimate “ignores baseline avoidance due to existing taxes.”
“Under current law, many wealthy taxpayers already use legal structures to avoid capital income taxes,” he noted. “A taxpayer who has already hidden an asset from the income tax is not going to voluntarily report that same asset for a new wealth tax.”
Tax Foundation senior fellow Jared Walczak was also skeptical of the $4.4 trillion estimate.
“To accept this revenue estimate as credible, you must believe that a 5% annual wealth tax on billionaires – on their investments and their closely-held businesses – will have no economic ramifications worth mentioning,” he wrote on X.
Sanders said the measure will help Americans.
“This legislation demands that the billionaire class in America finally pay their fair share of taxes so that we can create an economy that works for all of us, not just the 1%,” he said in a statement. “We can no longer tolerate a corrupt tax code that enables billionaires to pay a lower tax rate than the average worker.”
Republicans control both the U.S. House and Senate with slim majorities.
