To pay for Biden's social spending agenda, Democrats are considering a new tax targeting billionaires.
In 2020, Bill Gates' New Year's resolution was to get the federal government to raise taxes on the ultrawealthy - including himself. Now, that wish might come true, as Democrats eye higher taxes on America's billionaires.
"We've updated our tax system before to keep up with changing times, and we need to do it again, starting with raising taxes on people like me," Gates wrote on his blog at the time.
That's exactly what Democrats are planning to propose this week. A plan authored by Sen. Ron Wyden would target the unrealized gains - value that assets like stock accrue - of billionaires every year. It's not quite an outright wealth tax, but it comes close. And it would pay for the social safety net bill Democrats hope to vote on this week that includes expansions to healthcare and childcare for Americans.
While Elon Musk ripped the plan on Twitter, other billionaires from Warren Buffett to George Soros have proposed a wealth tax as a way to combat America's growing wealth gap and fund healthcare and education initiatives. In the run-up to the 2020 presidential election, a group of 18 ultrawealthy Americans, including Abigail Disney and members of the Pritzker and Gund families, published an open letter asking presidential candidates to support a moderate wealth tax.
Politicians, too, rolled out proposals on this front: A wealth tax like the one proposed by Sen. Elizabeth Warren would make ultrawealthy Americans pay the federal government a small percentage of their net worth each year. Bernie Sanders unveiled a wealth-tax plan that is even more aggressive than Warren's.
Inequality exacerbated by the pandemic has more strenuously renewed calls for a wealth tax, as America's billionaires added $2.1 trillion to their fortunes as millions dealt with with pandemic-induced unemployment and poverty. Mounting inequality isn't a new issue: In 2018, income inequality in the US reached its highest level in more than half a century. The ultrawealthy actually paid a smaller portion of their income in taxes than average Americans in 2018, an analysis of tax data by the University of California at Berkeley's Emmanuel Saez and Gabriel Zucman found.
While the idea of using a wealth tax to solve America's inequality problem has gained traction in recent years, proposals have been hampered by questions over the effectiveness and the constitutionality of such a tax, Business Insider previously reported.
Keep reading to learn more about some of the most high-profile billionaires and multimillionaires who have publicly supported raising taxes on the 1%, listed in chronological order.
The founder of Jimmy John's says it's "bullshit" that wealthy people are taking out loans to live on that are free of taxes.
Jimmy John Liautaud told The Daily Beast that he knows a lot of people have "accumulated massive, massive wealth" — and then borrow money. As ProPublica reported, taking out loans against large fortunes is one method that the ultra-wealthy employ to reduce how much they owe in taxes, since loans aren't taxed.
"That's tax free. And I think it's bullshit," Liautaud told the Daily Beast.
When it comes to gains for assets, he said: "Warren Buffett or Bill Gates, every year this shit's compounding. I paid more tax than Warren Buffett. And I'm worth 2 billion fucking dollars."
Dallas Mavericks owner Mark Cuban proposed taxing the wealthy to offset cutting payroll taxes in a November 2017 tweet.
—Mark Cuban (@mcuban) November 24, 2017
Now best known for his appearances on ABC's "Shark Tank," Cuban built a $4.5 billion fortune through a lifetime of business deals, including the $5.7 billion sale of Broadcast.com, and his ownership of the Dallas Mavericks, Business Insider reported.
Bill Gates has said he's paid over $10 billion in taxes over his lifetime - but he doesn't think that's enough.
"I need to pay higher taxes," Gates said in a 2018 interview with CNN's Fareed Zakaria. "I've paid more taxes, over $10 billion, than anyone else, but the government should require people in my position to pay significantly higher taxes."
In a December 30, 2019, post on his blog, Gates Notes, Gates proposed raising the estate tax and removing the cap on the amount of income subject to Medicare taxes. He also suggested closing the carried interest loophole that allows fund managers to pay lower capital gains rates on their incomes and making state and local taxes fairer, Market Insider's Theron Mohamed previously reported.
"That's why I'm for a tax system in which, if you have more money, you pay a higher percentage in taxes," Gates wrote. "And I think the rich should pay more than they currently do, and that includes Melinda and me."
On CNBC's Squawk Box, Warren Buffett said raising billionaires' taxes is the best way to help "a guy who is a wonderful citizen" but "just doesn't have market skills."
"The wealthy are definitely undertaxed relative to the general population," Buffett said on CNBC's "Squawk Box" in February 2019. Buffett has suggested that Congress expand income tax credits for low-income Americans, raising taxes on high earners in the process, CNBC reported.
Former Starbucks CEO Howard Schultz said he "should be paying higher taxes" at a CNN town hall in February, but called Rep. Alexandria Ocasio-Cortez's proposed 70% marginal tax rate for millionaires "punitive."
Schultz built a $3.8 billion fortune running the coffee chain, Business Insider previously reported. While Schultz left Starbucks in 2018, he still held onto more than 37.7 million shares — or roughly 3% — of the company's stock.
When asked if the wealthy should pay more in taxes on "60 Minutes," billionaire hedge-fund manager Ray Dalio replied: "Of course."
In the "60 Minutes" segment, Dalio said he thinks the American dream is lost and referred to the wealth gap as a "national emergency." Dalio, 70, founded his hedge fund, Bridgewater Associates, in his apartment in 1975, Business Insider reported. It now has $150 billion in assets under management. Dalio has a net worth of $20 billion, Forbes estimates.
Abigail Disney, the granddaughter of The Walt Disney Company cofounder Roy Disney, has made a name for herself as one of the biggest advocates for closing America's wealth gap.
The granddaughter of The Walt Disney Co. cofounder Roy Disney has made a name for herself as one of the company's most outspoken critics. The 59-year-old heiress has criticized the salary of Disney CEO Bob Iger and defended Meryl Streep after she called Walt Disney a "bigot," according to CNN Business.
Disney has a net worth of $120 million, she said in July 2019. "The internet says I have half a billion dollars and I might have something close to that if I'd been investing aggressively," Disney told the Financial Times.
Disney was one of 18 ultrawealthy Americas to sign an open letter in June asking presidential candidates to support a moderate wealth tax. The letter isn't the first time that Disney has spoken out about tax reform. Disney criticized the 2017 Republican tax bill in a NowThis video, saying the bill unfairly benefited the wealthy.
Heiress Agnes Gund and her daughter Catherine Gund also signed the wealth tax letter.
In 2015, Forbes estimated that the Gund family had a net worth of $3.4 billion and ranked them among the 100 wealthiest families in America.
Agnes Gund, 83, used the fortune she inherited from her father, the president of an Ohio-based bank, to become a philanthropist in arts and social justice, according to The New York Times. Agnes Gund received the National Medal of the Arts in 1997 from President Bill Clinton for her work, which included serving as the president of the Museum of Modern Art in New York.
Catherine Gund, 56, is an Emmy-winning film director and producer. Gund founded nonprofit production studio Aubin Pictures in 1996, according to her previous biography on the studio's website.
The Gunds weren't the only family who signed the letter together. So did Facebook cofounder Chris Hughes and his husband, political activist Sean Eldridge.
Hughes is a cofounder of Facebook. He left the social network in 2007 to become the online organizer for Barack Obama's first presidential campaign. Despite calling for Facebook to be broken up in May 2019, Hughes had a stake in the company worth $850 million, Newsweek reports. In 2016, Forbes put Hughes' net worth at $430 million.
In April 2021, Hughes told CNBC that Americans are "throwing out the idea that markets were ever free" and that it's time for a new capitalism.
Eldridge is a political activist and former congressional candidate in New York, according to Vanity Fair. Eldridge was born in Canada.
Ian and Liesel Pritzker Simmons signed the letter together.
"This is really a conservative position about increasing the stability of the economy in the long term and having an efficient source of taxation," Simmons told the Associated Press.
Simmons, 44, serves as the cofounder and principal of impact investing firm Blue Haven Initiative alongside his wife and fellow signatory, Liesel Pritzker Simmons, according to the firm's website. Simmons is the heir to a family fortune that stems from the construction of locks on the Erie Canal, according to Forbes.
Pritzker Simmons, an heir to the Pritzker family fortune, has a net worth of $600 million, according to a 2013 Forbes article. Simmons, now 35, is also a cofounder and principal of Blue Haven Initiative.
As a child, she starred in several big-name Hollywood productions, including "A Little Princess" and "Air Force One," alongside Harrison Ford. In 2002, Forbes reports, she sued her father and the Pritzker family and came away from it with a $500 million payout.
Simmons called retired Massachusetts real-estate developer Robert Bowditch and convinced him to sign the letter, too.
"Charitable giving by itself simply cannot provide enough money to support public goods and services, such as public education, roads and bridges, clean air," Bowditch told the Associated Press in October 2019. "It has to be done by taxes."
Bowditch has previously advocated for raising taxes on the wealthy: In 2010, he signed an open letter to President Obama asking him to allow tax cuts for millionaires to expire, according to a CBS affiliate in Boston.
Billionaire financier George Soros signed the letter with his son, Alexander Soros.
According to his personal website, Alexander Soros, 35, serves as deputy chair of the Open Society Foundations, a nonprofit founded by his father.
George Soros told The New York Times' Andrew Ross Sorkin he supports a wealth tax even though it creates "a moral problem" for him.
"I am in favor of taxing the rich," George Soros, 89, told The New York Times' Andrew Ross Sorkin in October 2019, "including a wealth tax. A financier makes people suspicious ... and it does create a moral problem for me. As I became so successful, it basically put a self-imposed constraint on me that actually interfered with making money."
The philanthropist made his fortune running Quantum Fund, which was once the largest hedge fund in the world. Soros has a net worth of $8.3 billion, Business Insider reported.
Investor Nick Hanauer believes a wealth tax would be good for America's economy.
"A wealth tax would not just be fair — it would be pro-growth," Hanauer wrote in an essay advocating for a wealth tax published on Business Insider. "And don't let the trickle-downers tell you otherwise."
Business Insider's Rich Feloni reported that Hanauer has said he's not a billionaire, but that, as both he and his wife have signed The Giving Pledge, their combined net worth at least approaches the $1 billion threshold.
Heiress and attorney Molly Munger told the Associated Press that seeing empty Newport Beach mansions from her family's boat on Memorial Day made her consider a wealth tax.
"It's just too much to watch that happen at the top and see what is happening at the bottom," Munger told the Associated Press in October 2019. "Isn't it a waste when beautiful homes on the beach are empty for most of the summer?"
Munger, 71, is the oldest daughter of Berkshire Hathaway vice chairman Charlie Munger. Munger is a Harvard Law graduate who works as a civil rights attorney in Pasadena, California, according to the Los Angeles Times. In 2012, she advocated for a tax hike in California to boost funding for the state's public schools.
Billionaire philanthropist Eli Broad wrote an op-ed in The New York Times in June 2019 advocating for a wealth tax, saying American capitalism "isn't working."
Broad doesn't believe that his philanthropic work and other policies including a $15 minimum wage, expanding access to health care, and reforming public education are doing enough to help low-income Americans, he wrote in The New York Times.
"It's time to start talking seriously about a wealth tax," Broad wrote in The Times. "I simply believe it's time for those of us with great wealth to commit to reducing income inequality, starting with the demand to be taxed at a higher rate than everyone else."
Broad built a $6.9 billion fortune after cofounding home builder Kaufman & Broad, according to Forbes.
Salesforce co-CEO Marc Benioff proposed a wealth tax in an October New York Times essay.
"Local efforts — like the tax I supported last year on San Francisco's largest companies to address our city's urgent homelessness crisis — will help," Benioff wrote in The New York Times in October 2019. "Nationally, increasing taxes on high-income individuals like myself would help generate the trillions of dollars that we desperately need to improve education and health care and fight climate change."
Benioff built a $6.5 billion fortune after founding software developer Salesforce. Benioff currently serves as the company's CEO.
Michael Bloomberg has made raising taxes on the wealthy a key part of his 2020 presidential campaign.
Bloomberg has included promises to support "taxing wealthy people like me" in ads since launching his campaign in November, Bloomberg News reported at the time.
As Politico reported, Bloomberg ultimately proposed a 5% surtax for people earning over $5 million annually — as well as an increase to the capital gains rate and corporate tax rate. But Bloomberg said during his campaign that he believes that Warren and Sanders' wealth tax "just doesn't work," he said at campaign stop in Phoenix in November.
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