Given a choice between voting for either Senator Elizabeth Warren or Senator Bernie Sanders in the Democratic primary, billionaire Jeff Bezos would be wise to pick the former. She would still hurt his pocket but to a lesser degree.
According to a plan released by Warren, individuals with a net worth of more than $1 billion would incur a wealth tax of 3%. Currently, the Amazon (NASDAQ: AMZN) co-founder, Chairman, and CEO is worth $108.7 billion, according to Forbes.
In the first year, Jeff Bezos would thus incur a wealth tax bill of approximately $3.3 billion if Warren wins the U.S. presidency and goes on to put the plan into effect. This would also be under the assumption that Bezos’ current net worth remains constant.
If Sanders were to win the U.S. presidency, on the other hand, Bezos would see a bigger hit to his pockets. Under the wealth tax plan released by Sanders, individuals with a net worth of over $10 billion would incur a wealth tax rate of 8%. The Amazon boss would consequently pay $8.7 billion in the first year if Sanders became president and Bezos’ wealth did not fluctuate.
Sanders’ tax plan on the extremely wealthy comes months after Warren released hers and has now upped the ante in the Democratic primary.
The Vermont Senator’s Tax on Extreme Wealth plan is targeting about 180,000 households in the United States who comprise the 0.1%, the wealthiest tax bracket. The Vermont Senator has promised that in one and a half decades, the wealth of billionaires will have been reduced by 50%.
On a graduating scale, Sanders’ Tax on Extreme Wealth would apply a rate of 1% on married couples with a net worth of over $32 million. This rate would rise to 2% for multi-millionaires with a net worth of between $50 million and $250 million. A net worth of between $250 million and $500 million would attract a wealth tax rate of 3%, while a net worth of between $500 million and $1 billion would be slapped with a 4% wealth tax rate.
Billionaires worth between $1 billion and $2.5 billion would incur a 5% wealth tax rate, while those with a net worth of between $2.5 billion and $5 billion would attract a 6% wealth tax rate. A wealth tax rate of 7% would be imposed on those worth between $5 billion and $10 billion.
Sanders expects the plan to raise $4.35 trillion in a decade if he were to become president. This is about 58.2% more than what Warren would raise under her plan over a similar period. Part of the reason for this is that Warren’s Ultra-Millionaire Tax targets fewer extremely wealthy people and is also less punitive.
Warren’s plan imposes a 2% wealth tax on households with a net worth between $50 million and $1 billion and a 3% rate on the extremely wealth such as Bezos worth above $1 billion.
Last modified: January 10, 2020 3:02 PM UTC