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Senator Bernie Sanders is arguing that America's wealthiest individuals should pay higher taxes to fund universal childcare, tuition-free public college and millions of affordable housing units, saying some billionaires pay a lower effective tax rate than truck drivers.
Sanders, an independent from Vermont, has put the argument at the centre of legislation he introduced with Representative Ro Khanna, the Make Billionaires Pay Their Fair Share Act. The bill would impose a 5 per cent annual tax on the wealth of the 938 billionaires in America, who are collectively worth more than $8.2 trillion. Over 10 years it would raise $4.4 trillion, according to an analysis by economists Emmanuel Saez and Gabriel Zucman of the University of California, Berkeley.
Under the bill, Sanders says, the money raised in the first year would provide a $3,000 direct payment to every man, woman and child in a household making $150,000 or less — $12,000 for a family of four. It would also fund the building or preservation of 7 million affordable homes, guarantee universal childcare, expand Medicare to cover dental, vision and hearing, ensure no public school teacher earns less than $60,000 a year, and expand home healthcare for seniors and people with disabilities. The bill would also reverse about $1.1 trillion in Medicaid and Affordable Care Act cuts.
Sanders points to the gap between what billionaires and working people pay. He says Elon Musk paid an effective tax rate of less than 3.3 per cent, while the average truck driver paid 8.4 per cent; Jeff Bezos, now worth $223 billion, paid less than 1 per cent, while the average firefighter paid 8.7 per cent; and Michael Bloomberg, worth $109 billion, paid 1.3 per cent, while the average registered nurse paid 13.3 per cent.
Supporters say taxing extreme wealth could reduce inequality and expand public services. Critics warn higher taxes could discourage investment, affect businesses and slow economic growth. The Tax Foundation has argued that avoidance and administrative complexity could cut the amount collected to about $3.3 trillion over a decade, rather than $4.4 trillion.
Sanders also campaigned for California's Proposition 40, a one-time 5 per cent tax on the wealth of Californians worth more than $1 billion, aimed at funding the state's healthcare system. He rallied supporters in Los Angeles last month, telling the crowd the whole country was watching the vote. On Tuesday, November 3, California voters rejected the measure, with about 56 per cent voting against it, and approved Proposition 42, which bars new personal-property wealth taxes. Backers of Proposition 40 conceded defeat and said they would pursue litigation, legislative options or a return to the ballot in 2028.
The bill has not been brought to a vote in Congress. Sanders and Khanna have said they introduced it to shift the debate ahead of the 2028 Democratic presidential primary.