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Illustration: Aïda Amer/Axios

Taxing the rich is an idea that's back. An "ultra-millionaire tax" introduced by Elizabeth Warren and other left-wing Democrats this week would raise more than $3 trillion over 10 years, they say, while making the tax system as a whole more fair.

Why it matters: New taxes would be a necessary part of any Democratic plan to redistribute wealth and reduce inequality. But President Biden has more urgent priorities — and Warren's wealth tax in particular faces constitutional obstacles that make it a hard sell.

The big picture: The very richest Americans pay much less tax, as a proportion of their total net worth, than the rest of us.

  • By the numbers: The bottom 99% of Americans pay about 7.2% of their net worth every year in taxes, per Warren. The top 0.1%, by contrast, pay about 3.2%.
  • If that top 0.1% paid an extra 2% wealth tax on top of their existing taxes, that would bring their tax rate up to 5.2% of their net worth, which would still be below average.

Context: Warren's renewed push for a wealth tax — which was also a centerpiece of her presidential campaign — is part of her larger strategy to keep up the pressure on Biden's left flank, and to make sure that inequality doesn't get forgotten about.

  • Even without its wealth tax component, Warren's bill would allot an extra $100 billion to the IRS, to help it audit more rich taxpayers and collect more taxes.

How it works: Warren's tax would exempt the first $50 million of wealth for everybody. After that, individuals and households would have to pay a wealth tax of 2% of their wealth over and above $50 million.

  • Billionaires would face an extra 1% surcharge on wealth over and above $1 billion.
  • The tax would be assessed annually, unlike the one-off 14.25% wealth tax that Donald Trump proposed in 1999.

The catch: Conservative scholars claim that such a tax would be unconstitutional.

  • Article I of the Constitution, Section 9, bars any "capitation, or other direct, tax" — unless such a tax is levied in direct proportion to the number of people who live in each state.
  • The Supreme Court ruled in 1895 that a federal income tax was therefore unconstitutional. The 16th Amendment, ratified in 1913, made income tax constitutional, but many scholars believe it doesn't cover a wealth tax.
  • Even some proponents of a wealth tax, such as French economist Thomas Piketty, worry about its constitutionality. “I realize that this is unconstitutional, but constitutions have been changed throughout history," he said in 2014. "That shouldn’t be the end of the discussion.”

The other side: There is an argument that a wealth tax is constitutional, and that the 1895 case was wrongly decided. It's far from clear, however, that the Roberts court, with its 6-3 conservative majority, would rule that way.

The bottom line: Even if a wealth tax gained the support of the president and both houses of Congress, it would still risk being shot down by SCOTUS after being signed into law.

Go deeper

2 hours ago - World

U.S. and NATO answer Putin in writing while bracing for Ukraine invasion

NATO Secretary-General Jens Stoltenberg. Photo: Dursun Aydemir/Anadolu Agency via Getty

The U.S. and NATO provided Russia with written proposals on Wednesday to advance a "diplomatic path forward," even as they warned that Russia could invade Ukraine within days.

Why it matters: This is a delicate diplomatic balancing act. The U.S. and NATO want to show they're serious about diplomacy but unwilling to compromise on "core principles" — all without providing Vladimir Putin with an additional pretext for escalation.

The political leanings of the Supreme Court justices

Data: Martin-Quinn scores; Chart: Axios Visuals

The Supreme Court will continue to have a solid conservative majority even with Justice Stephen Breyer's retirement.

How to read the chart: An analysis by political scientists Andrew Martin and Kevin Quinn, known as the Martin-Quinn Score, places judges on an ideological spectrum. A lower score indicates a more liberal justice, whereas a higher score indicates a more conservative justice.

The front-runners for Biden's Supreme Court pick

Judge Kentaji Brown Jackson (left) and Justice Leondra Kruger (right) Tom Williams-Pool/Getty Images and Lonnie Tague, US Department of Justice

Two highly accomplished Black female judges — Ketanji Brown Jackson, a judge on the D.C. Circuit Court of Appeals; and Leondra Kruger, a justice on the California Supreme Court — are seen as the early front-runners to replace retiring Supreme Court Justice Stephen Breyer.

The big picture: Jackson is a powerful federal judge with a record that progressives feel they can trust. Kruger was a highly regarded litigator and has carved out a reputation for working well with conservative judges.