Taxing Millionaires & Billionaires — Washington State, California and Congress

Over the last couple of weeks, Weekly Industry News has looked at taxing millionaires. A couple of weeks ago, the PIA Western Alliance state of Washington became the first state in the country to tax millionaires when the Legislature passed a 9% hit on them just before adjourning. 

In California a tax on millionaires is likely to be on the November ballot. If it passes, there will be a one time 5% tax on all billionaires residing in California. Supporters have until June 24th to gather 874,641 signatures.

And then we have what is now happening in Congress.

Vermont Sen. Bernie Sanders and California Democrat, Rep. Ro Khanna along with Democrats Rhode Island Rep. Seth Magaziner and Michigan Rep. Rashida Tlaib are sponsoring a bill to give each American a $3,000 payment for relief from the high cost of living.

That money — if the bill ever sees the light of day — is part of the Make Billionaires Pay Their Fair Share Act. It will be funded by an annual tax on the wealth of billionaires.

Progressive advocates and labor groups are endorsing the plan.

Here’s how it works. All individuals with household incomes of less than $150,000 would get $3,000 the first year. And it’s a “per person” payment so a family of four could get as much as $12,000.

To pay for it, the 938 people in the U.S. considered billionaires will be taxed 5% of their estimated wealth. They have a combined income of over $8 trillion. Sanders and Khanna say this will provide immediate financial relief for those having trouble with housing, healthcare, food and childcare costs.

Michael Ryan of MichaelRyanMoney.com said this is more likely a placeholder. It hasn’t gotten out of committee in either chamber of Congress. This version is basically designed to get other politicians and more people interested.

“In a Republican-controlled Congress, a new billionaire wealth tax plus universal cash payments has long odds. It’s more likely a messaging bill or negotiating marker than actual law,” he said. “The core insight is real: one-time payments to lower income households have higher velocity. They spend it immediately versus the same dollars going to higher earners, who tend to save or invest.”

Source link: MSN — https://bit.ly/4syhbtH