Levying a progressive tax on the ultra-wealthy has been a talking point long popular with many United States Democrats, yet such a policy would have been unimaginable under a Republican administration and a split Congress.
Now that the Democratic Party is back in control of both the White House and Capitol Hill, the initiative is formally on the table: On March 1, a group of Democratic lawmakers led by Sen. Elizabeth Warren introduced legislation proposing an annual tax on the households and trusts worth more than $50 million, including the value of property such as real estate and stocks.
As new bridges between traditional capital and the digital asset space emerge almost daily, highnet-worth individuals can move value to crypto with more ease than ever before. Can a prospective wealth tax, should it be codified in law, affect their willingness to do so?
Marketed as The Ultra-Millionaire Tax, Senator Warren’s bill proposes a 2% annual tax on the net worth of any household between $50 million and $1 billion, and a 3% tax for those worth more than $1 billion. The framers contend that the burden will only fall on the wealthiest 100,000 households in the nation, or the top 0.05% of wealth distribution.
The lawmakers argue that the initiative could bring in at least $3 trillion in federal revenue over 10 years — a pool of resources that could be directed to support underfunded areas such as education, childcare and infrastructure.
The proposed legislation would have to clear the U.S. Senate before it becomes law. Even though Democrats and Republicans are currently tied 50-50 in the chamber, with the Democratic Vice President Kamala Harris holding a tie-breaking vote, most bills still take at least 60 votes for approval. As Bloomberg noted, Democrats are at least hoping to append some elements of the tax to the budget bill that will be reconciled later in the year.
It doesn’t come as unexpected that the initiative received immediate…