A group of progressive Democrats proposed legislation this week aimed at generating millions of dollars in new tax revenue by taxing "extreme wealth."
The Oppose Limitless Inequality Growth and Reverse Community Harms Act, or the OLIGARCH Act, was introduced by Rep. Barbara Lee, D-Calif., and several other progressive Democrats.
Lee, who is running to replace Sen. Dianne Feinstein in the Senate, said her bill is aimed at taxing extreme wealth in the name of fighting the "threat to democracy posed by aristocracy."
"Inequality in the United States is worse in 2023 than it was during the Gilded Age. It is unacceptable that millions of hardworking people remain impoverished while the top 0.1% hold over 20% of the nation’s wealth," she said. "The OLIGARCH Act is the solution we need to close the exorbitant wealth gap in America and create a tax system where everyone pays their fair share."
One sponsor of the bill, Rep. Jamaal Bowman, D-N.Y., said wealth inequality is the result of centuries-old discrimination in America that must be rectified but stopped short of calling it a reparations plan.
"The extreme wealth inequality we see today, which disproportionately impacts Black and brown families, is a result of centuries of discrimination towards working-class, vulnerable communities while allowing tax breaks for the rich and wealthy," he said.
The bill creates a 2% tax on all wealth between 1,000 and 10,000 times median household wealth, which the U.S. Census Bureau said was $140,000 in 2020. Using those numbers, the Democrats’ bill would hit people with a 2% tax if their wealth was between $140 million and $1.4 billion.
A 2% tax on $1.4 billion would create a tax bill of $28 million.
The tax rises to 4% for wealth between 10,000 and 100,000 times median household wealth, or between $1.4 billion and $14 billion using 2020 data. Within this bracket, applying the 4% tax on $10 billion worth of wealth, for example, would create a tax bill of $400 million.
The tax jumps again to 6% for wealth between 100,000 and 1 million times median household wealth, or between $14 billion and $140 billion. Within this bracket, a 6% tax on $100 billion in wealth would create a $6 billion tax.
Finally, the bill creates an 8% tax on all wealth above 1 million times the median household wealth, or about $140 billion. Very few people have wealth that falls into that category. Elon Musk was reportedly worth about $240 billion as of July, and one sponsor of the bill mentioned Musk and other wealthy businessmen in a statement supporting the bill.
"Right now, the 400 richest Americans have 22,000 times the political influence of the bottom 90%," said Rep. Summer Lee, D-Pa. "Our teachers, firefighters and nurses are paying more in taxes than Jeff Bezos, Elon Musk and Mark Zuckerberg."