Elizabeth’s Ultra-Millionaire Tax Is Easily Enforceable
Despite what billionaires hope you’ll believe, the government can easily enforce Elizabeth’s Ultra-Millionaire Tax.
Elizabeth’s Ultra-Millionaire Tax asks the wealthiest top 0.1% of American families to pay a small annual tax on their net worth above $50 million. We have the tools we need to make sure the super-wealthy actually pay this tax rather than skipping out on their obligations.
The first step is valuing the assets of the super-wealthy. That’s pretty easy for most typical assets — for example, publicly traded stocks have a clear market price. And assets like fine art or expensive jewelry have an insured value. The estate tax already requires these kinds of calculations, and the IRS already has a lot of rules for valuing different kinds of assets. By building on this framework, we can effectively calculate the net worth of the small slice of ultra-wealthy American families.
The second step is ensuring the super-wealthy don’t evade the Ultra-Millionaire Tax. Elizabeth’s proposal learns from the experiences of other countries to create a comprehensive plan to crack down on evasion. Her proposal has no loopholes or exemptions. It increases funding for IRS enforcement to hold accountable wealthy families that try to dodge their obligations, just like we do for anyone else who tries to break the law. And it guarantees that a big chunk of households subject to the Ultra-Millionaire Tax will be audited — a good way to catch and deter any under-reporting of assets.
Sure, rich people will still do their best to try and game the system. But keep in mind that only the 75,000 wealthiest families in the country will have to pay this tax, making it easier to enforce. And an analysis from two of the nation’s top economic experts on wealth inequality and tax evasion estimate that, even with an expected rate of noncompliance in line with what other countries have experienced, the Ultra-Millionaire Tax will still raise nearly $3 trillion in new revenue.Finally, while taxpayers in other countries can avoid taxes simply by leaving the country, the United States requires American citizens to pay taxes no matter where they live in the world. And to ensure that no wealthy citizen can avoid their obligations by renouncing their American citizenship, Elizabeth is proposing a one-time 40% tax on the net worth above $50 million of anyone seeking to give up their American citizenship. This “exit tax” ensures that no one can become rich by taking advantage of everything our nation has to offer and then skip out on paying their fair share of the bill.