Updated Sep 24, 2019

Scoop: Bernie Sanders one-ups Warren with his own wealth tax

Photo: Joshua Lott/Getty Images

Sen. Bernie Sanders has released a wealth tax that's even more aggressive than Sen. Elizabeth Warren's "ultra-millionaire tax." Axios first reported Sanders' proposal.

Why it matters: Sanders keeps trying to remind voters that he's the original when it comes to progressive policy in the 2020 field, but he's being eclipsed at every turn by the surging Warren. The Vermont senator has proposed massive spending — $16 trillion on climate alone — and so has to show a little revenue to add credibility to his proposals.

Details: A wealth tax is applied not to what people earn but what they own, including stocks and land.

  • The Sanders campaign said it would apply taxes on households with net worths above $32 million and raise an estimated $4.35 trillion over the next 10 years, which would be used to fund Sanders' affordable housing, universal child care and Medicare for All plans.
  • Warren's plan, which applies to households with a net worth over $50 million, proposes an annual 2% tax on assets above a taxpayer's first $50 million, and 3% on assets that exceed $1 billion.

Yes, but: Both candidates may be unable to even attempt to impose their wealth tax plans if the Supreme Court strikes it down.

  • Both proposals revive an aspect of constitutional law that stems from the Constitution’s ban of direct taxes.
  • The Supreme Court in 1895 ruled that a wealth tax is a direct tax and is unconstitutional, but the American Bar Association has argued that a tax on the wealthy is constitutional.

Go deeper: Bernie Sanders' plan to restructure your life

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Warren would exhaust wealth tax with $800 billion education plan

Photo: Zach Gibson/Getty Images

Elizabeth Warren announced a sweeping $800 billion public education plan on Monday, but it would exhaust the remainder of the $2.75 trillion that she says would be raised under her wealth tax proposal, the Wall Street Journal reports.

Why it matters: The announcement comes at a time when she's been criticized for dodging questions from her 2020 Democratic rivals on how she plans to pay for "Medicare for All."

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The overall tax rate for the richest 400 households last year was 23%

Hudson Yards neighborhood in Manhattan. Photo: Spencer Platt/Getty Images

The 400 wealthiest Americans last year paid a lower total tax rate for federal, state and local taxes than any other income group for the first time on record, according to the New York Times.

Why it matters: Tax rate for the wealthy has steadily dropped since the 1950s and 1960s, when the wealthy paid vastly higher tax rates than the middle class or poor.

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Architects of Elizabeth Warren wealth tax say we're in new Gilded Age

In an interview with Axios' Mike Allen for "Axios on HBO," economists Emmanuel Saez and Gabriel Zucman, who helped guide Democrat Sen. Elizabeth Warren's 2020 wealth tax plan, said America has entered a new Gilded Age.

The big picture: Warren's "ultra-millionaire tax" is one of the most progressive tax plans on the Democratic market. It aims to adjust rates so that the rich are not paying less, proportionately, in taxes than the wealthy. Opponents of the plan argue it would de-incentivize investments and stifle economic growth.

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