Sanders offers bill to tax billionaires’ wealth gains during pandemic

Sen. Bernie Sanders (I-Vt.) on Thursday introduced legislation to impose a 60-percent tax on billionaires’ wealth gains from March 18 through the end of the year, and to use the revenue raised by the tax to direct Medicare to pay all Americans’ out-of-pocket health-care expenses for a 1-year period.

The bill from Sanders, a prominent progressive and runner-up in the 2020 Democratic presidential primary, connects two of his longtime priorities: reducing inequality and providing federal health-care coverage for all Americans.

Sanders said Thursday that the measure is designed to help people who are struggling during the pandemic.

“The legislation I am introducing today will tax the obscene wealth gains billionaires have made during this extraordinary crisis to guarantee healthcare as a right to all for an entire year,” Sanders said in a news release.

“At a time of enormous economic pain and suffering, we have a fundamental choice to make,” he added. “We can continue to allow the very rich to get much richer while everyone else gets poorer and poorer. Or we can tax the winnings a handful of billionaires made during the pandemic to improve the health and well-being of tens of millions of Americans.”

Sanders introduced the bill along with Sens. Ed Markey (D-Mass.) and Kirsten Gillibrand (D-N.Y.).

“Not only is this a common-sense proposal, but it’s a moral one and Congress should be doing all we can to assist Americans struggling right now,” Gillibrand said.

The bill would impose the 60-percent tax on the amount of billionaires’ increases in the net value of their assets between March 18 and the end of the year. The net value of assets on a specified day would be the difference between the value of all tangible and intangible property and the amount of debt owed.

The bill would direct the Treasury Department to create rules and methods for determining the value of assets for the purposes of calculating the tax, as well as anti-abuse rules to prevent billionaires from avoiding the 60-percent tax.

The health-care portion of the bill is similar to legislation that Sanders and Rep. Pramila Jayapal (D-Wash.) introduced earlier this year. It would, for a 1-year period, have Medicare fully cover costs of medically necessary health care for those who are uninsured, as well as out-of-pocket expenses related to medically necessary health care for those who are insured.

Sanders’s office cited an estimate from the progressive Americans for Tax Fairness (ATF) and the Institute for Policy Studies (IPS) that found that a 60-percent tax on 467 billionaires’ wealth gains from March 18 to Aug. 5 would raise about $422 billion.

The groups said in a press release there are an additional 176 billionaires in the U.S., but those billionaires currently wouldn’t have to pay Sanders’s tax because they either have seen their wealth decline from March 18 through Aug. 5 or they joined the billionaires’ list during that period and their wealth growth in that timeframe was not greater than $1 billion.

Sanders’s office said the amount raised by the tax would be more than enough to cover the cost of using Medicare to cover out-of-pocket health-care costs for a year, citing an estimate from the Committee for a Responsible Federal Budget (CRFB), a budget watchdog group, that such a proposal would cost $400 billion over a year.

CRFB’s analysis was based on a plan Sanders’s presidential campaign released earlier this year that did not include legislative text. The analysis says that it uses conservative assumptions.

Marc Goldwein, senior vice president and senior policy director at CRFB, said that the cost of the health care portion of Sanders’s bill is likely to be higher than $400 billion, but he was not sure how much higher the cost would be.

Goldwein critiqued the March 18 start date for the tax-assessment period in the bill, since the stock market was near its low point for the year on that date. He said that it’s likely that many billionaires are wealthier now than they were prior to the pandemic, but not by as much as it would appear based on a March 18 start date.

“That date is before when we were in the thickest of the unemployment crisis, but it was literally at the worst part of the stock market crisis so far,” he said.

Sanders’s office said that the March 18 start date for the period in which wealth gains would be taxed was chosen because that was around when the Federal Reserve announced a number of emergency lending facilities aimed at mitigating the financial impact of the coronavirus.

ATF and IPS also noted that March 18 was around when coronavirus-related lockdowns started, and that Forbes magazines’ annual report on billionaires’ wealth includes data as of March 18.

Chuck Collins, director of IPS’s program on inequality, said an analysis that looked at billionaires’ wealth since the start of the year would still find significant increases. He spoke favorably about Sanders’s bill.

“I think it’s well-targeted and it addresses a deep rift in the society right now,” he said.