Thursday before last, Sen. Bernie Sanders (I-Vt.), together with Sens. Ed Markey (D-Mass.) and Kirsten Gillibrand (D-N.Y.), introduced the Make Billionaires Pay Act.
"The legislation I am introducing today will tax the obscene wealth gains billionaires have made during this extraordinary crisis . . . ,” said Sanders.
"As more than 160,000 Americans have lost their lives and millions more have lost their jobs, it is unconscionable that the super-wealthy are getting even richer in the midst of this crisis," declared Sen. Markey. “The American people pay with their lives every day. . . . It is time the country’s wealthiest do the same off with their profits." [sic]
(You probably hadn’t realized that billionaires’ increasing wealth was the cause of COVID illnesses, deaths, and job losses.)
According to Sen. Sanders’ news release, 467 billionaires accumulated additional wealth of $731 billion between March 18, 2020 and August 5, 2020. Linked to the news release is an Excel spreadsheet listing those billionaires, their wealth on those dates, the increase during that period, and the federal revenue that would result from confiscating 60% of it. (In a hidden column, the spreadsheet also calculates the revenue that would result from confiscating 50% of it. And, oddly, the spreadsheet numbers don’t balance.)
Sanders et al calculate that claiming 60% of what they call “pandemic wealth” through August 5, 2020, would bring $422 billion into the Federal Treasury. The proposed tax, however, would not be limited to the wealth gains between March 18 and August 5, but would include wealth gains through January 1, 2021. It would be a one-time imposition. (Can I interest you in some property on the Arizona seashore?)
Sanders, et al have a destination for these additional federal revenues. According to the draft legislation, its purpose is:
To impose an emergency tax on the increase in wealth of billionaires during the COVID–19 pandemic in order to pay for all of the out of pocket healthcare expenses of the uninsured and under-insured, including prescription drugs, for one year.
The proposed legislation makes it clear that the medical costs to be covered include those of aliens in the U.S. illegally.
The tax code is often used to redistribute income, and even to tax windfall gains. After the oil embargo and other economic pressures drove up the price of crude oil in the late 1970s, for example, Congress passed, and President Carter signed, The Crude Oil Windfall Profits Tax of 1980 (P.L. 96-223). The tax fell on oil companies, and was measured by the excess profit per barrel over a stated amount. Expensive to implement, and disappointing in revenue production, the tax was repealed in 1988.
Would this confiscatory tax on specified persons pass constitutional muster? Thoughtful scholars will likely be weighing in on this subject at length.
In the meantime, will anyone oppose the government’s confiscating some of the wealth of billionaires? If the government were to take this step, how long would it be before mere millionaires are in the line of fire? And once the precedent has been set, what could follow?