More than a dozen prominent U.S. billionaires call for a new government tax on extreme wealth to help tackle income inequality, provide funding for climate change initiatives and an array of public health concerns .
Addressed to “2020 presidential candidates”Billionaires who signed the letter include financier George Soros, heiresses Liesel and Regan Pritzker, Abigail Disney and Facebook co-founder Chris Hughes.
The letter calls for an increase in federal wealth taxes to “substantially fund” new investments in sectors such as clean energy, universal child care, student loan debt relief, improvement infrastructure and tax relief for low-income families.
“America has a moral, ethical and economic responsibility to further tax our wealth,” urged the 19 signatories of the letter.
“Establishing a wealth tax is in the interest of our republic,” they added, arguing that a moderate tax on the richest Americans enjoys the support of a majority of Americans. It is estimated that the tax could generate nearly $ 3 billion in revenue over 10 years.
The proposal is likely to garner broad support from Democratic candidates, among whom the idea of an extreme wealth tax has gained ground. Senator Elizabeth Warren proposed a 2% tax on assets of $ 50 million or more – including stocks, bonds, yachts, cars and art – and an additional 1% on assets over of $ 1 billion.
Warren estimates that such a tax would affect 75,000 families and bring in $ 2.75 billion over 10 years.
In a related move on Monday, Senator Bernie Sanders announced a plan to write off $ 1.6 billion in outstanding student debt. Dubbed “The College for All Act,” the cost of freeing 45 million Americans from higher education debt would be covered by new Wall Street transaction taxes, not the personal incomes of billionaires.
The proposal goes beyond Warren’s student loan plan, which caps debt cancellation at $ 50,000 and offers no relief to those earning more than $ 250,000.
The initiatives are based on the same premise: an inequitable distribution of wealth exacerbated by an inequitable tax burden across the income spectrum.
The letter to presidential candidates follows concerns from the very wealthy American public about growing inequalities.
Warren Buffett, founder of Berkshire Hathaway, published an essay in 2011 noting that his effective tax rate was “actually a lower percentage than that paid by any of the other 20 people in our office.” This sparked the idea of a “Buffett rule,” supported by then-President Obama, requiring millionaires to pay at least a 30% rate.
In April, Ray Dalio, the founder of Bridgewater, the world’s largest hedge fund, expressed fears about the income inequality gap.
The yawning divide between rich and poor is a “national emergency” that poses an “existential risk to the United States,” Dalio wrote in an 8,000 word blog post on LinkedIn.
“I believe that all good things taken to extremes can be self-destructive and everything has to evolve or die. This is now true for capitalism, ”he wrote.
JP Morgan boss Jamie Dimon, chief investment officer Warren Buffett and Blackstone chairman Stephen Schwarzman have all publicly expressed concern that income inequality has become a barrier to the functioning of a society.
A recent analysis of a Federal Reserve Report found that the richest 1% of Americans have seen their net worth increase by $ 21 billion over the past 30 years, while the wealth of the bottom 50% has fallen by $ 900 billion.