This past week Bernie Sanders released his plan for a wealth tax that would cut the wealth of billionaires in half over the next 15 years. His objective is to spend the revenue on funding social programs such as affordable housing, universal childcare, and medicare for all.
Before diving into the details of the plan, we should start by clearing the air with some facts about wealth concentration in the United States. Every single president (every single one), since Richard Nixon has enacted policies to transfer wealth from the lower and middle classes to the wealthiest Americans. In 1970 the marginal tax rate on the 0.01% was over 75%. Today in 2019 it is 37%.
Given the transfer of wealth, it’s no surprise that over the past 30 years the top 1 percent has seen a $21 trillion increase in its wealth. Compare that to the bottom half of American society which has lost $900 billion in wealth. Every administration has been complicit, Democrat or Republican all have worked for corporations and the uber-wealthy first, Americans second. A U.S. Census borough studying poverty over the last 70 years shows an additional 7 Million people in poverty since the year 2000 .
Bernie’s plan is undoubtedly a progressive tax in terms of ideology but isn’t traditional progressive taxation. What differentiates this from most taxes we’re used to is that it’s based on an individual or couples total net worth. When we typically hear progressive taxation, it refers to a sliding scale of tax on income. So again, Bernie’s tax focuses on net worth, not income. That’s important because for the most traditional progressive, income taxation lacks genuine impact and makes it about whose class interest is being served.
Bernie’s plan starts with a 1% tax on net worth above $32 million for a married couple. That means a married couple with $32.5 million would be taxed on the additional 0.5 million and pay a wealth tax of $5,000.
The tax rate increases to:
These thresholds would be cut in half for a single person.
Elizabeth Warren’s plan, by contrast, would add a 2% annual tax on net worth above $50 million & a 3% tax on net worth above $1 billion .
Bernie’s plan also increases funding for the IRS to enforce existing and newly proposed tax laws. It also includes mandatory audits of billionaires and a 40 to 60% exit tax for uber-wealthy individuals who attempt to expatriate to avoid these new taxes.
Funding the IRS is one of the most unexciting progressive policies to come out of Bernie’s campaign but also one of the most impactful. The IRS has been consistently defunded, and recent policy change has IRS focus audits on low-income people over high. To put it another way, we are paying taxes to audit poor people . Funding the IRS is a way to enforce new and existing tax laws for the country’s highest earners.
The last paragraph of Bernie’s plan talks about how his wealth plan isn’t radical and compares this wealth tax to property tax. Essentially arguing that for the vast majority of Americans property tax is a wealth tax. He concludes by sharing that the majority of wealth held by the top 0.1% is not in property assets, making property tax disproportionately a middle and low-income tax. It’s a strong argument and one that I’ll undoubtedly be adding to my repertoire for future conversations.
Thinking Progressively about this assertive wealth tax, it’s a massive step in the right direction. Look, at the end of the day, a free society cannot exist within a class structure. Investments in social, technological, and infrastructure projects require capital. An economic arrangement that allows wealth to be concentrated so significantly among so few is both unsustainable and undesirable. Therefore, society bears the right responsibility to redistribute that wealth when needed.
Some may argue that this type of wealth redistribution is unconstitutional. That isn’t true. Article I, sections 8 and 9 of the Constitution  discuss taxation and the government’s ability to assign new taxes. Section 9 talks about how no direct tax may be assigned without a proportional assessment of people in a state. It’s a relic from slavery, the 3/5ths compromise, and we’re going to have to grapple with in fighting to pass this legislation.
Multiple professors have already argued  that there is no legal or functional reason to have a wealth tax applied proportionally by state. Unfortunately, the packing of the supreme court with conservative, partisan judges creates an obstacle that may artificially stall or prevent the legislation from becoming a reality.
Redistributive taxation is a fine start, but progressives mustn’t allow it to become an end. Equality of circumstance is not our goal. The structural transformation of the economy and politics is. Most of the time, when we hear about new taxation, it acts as a retreat from the effort required to reshape economic institutions. It’s akin to putting a band-aid on a wound that requires surgery.
Where Bernie’s plan stands out above the rest is that his taxation is generating capital for the transformation of the institutional arrangements of society. By beginning the process of expansion into a more in-depth suite of vital protections such as healthcare, socialized energy production, and a job guarantee, the Sanders team is starting the real work of systemic reformation. That’s something that every progressive should be excited about.
 Tax on Extreme Wealth by Bernie Sanders https://berniesanders.com/issues/tax-extreme-wealth/
 Poverty in the United States Wikipedia https://en.wikipedia.org/wiki/Poverty_in_the_United_States#/media/File:Number_in_Poverty_and_Poverty_Rate,_1959_to_2017.png
 IRS budget cuts cost $34.3B in lost revenue from big business by Michael Cohn Accountin Today https://www.accountingtoday.com/news/irs-budget-cuts-mean-34-3b-in-lost-revenue-from-big-business
 United States Constitution Article I Sections 8 National Constitution Center https://constitutioncenter.org/interactive-constitution/articles/article-i#section-8
 United States Constitution Article I Sections 9 National Constitution Center https://constitutioncenter.org/interactive-constitution/articles/article-i#section-9
The Constitutionality of a National Wealth Tax https://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=11279&context=ilj