Bernie Sanders proposes new wealth tax: ‘I don’t think that billionaires should exist’

'This proposal does not eliminate billionaires, but it eliminates a lot of the wealth that billionaires have, and I think that's exactly what we should be doing'

Bernie Sanders has unveiled an aggressive new wealth tax proposal to fund his sweeping social programmes that would outdo a plan put forth by fellow 2020 hopeful Elizabeth Warren.

The Vermont senator released his policy idea on Tuesday morning and said it would raise an estimated $4.35tn (£3.5tn) over the next decade to help fund things like universal health care, childcare and affordable housing initiatives.

Whereas the plan put forth by Ms Warren — who has steadily risen in the polls over recent months, surpassing Mr Sanders to become the second front-runner behind former vice president Joe Biden — would put a 2 per cent tax on all net worth above $50m (£40m) and raise an estimated $2.75tn (£2.2tn) over the next ten years, Mr Sanders has offered a sliding scale with higher taxes on additional wealth.

The plan begins with a 1 per cent tax on all net worth above $32m (£25.7m) for married couples, then 2 per cent on net worth between $50m (£40m) to $250m (£200.4m), 3 per cent on net worth between $250m (£200.4m) and $500m (£400.7m) and so on. The brackets continue all the way up to an 8 per cent tax on net worth above $10bn (£8bn), and would be cut in half for single filers, according to the proposal.

Speaking to the New York Times about his new plan, which he would seek to have implemented if elected to the White House in 2020, Mr Sanders said: “I don’t think that billionaires should exist.”

The senator has long called for a wealth tax programme, writing in his 1997 book Outsider in the House that it was “high time to establish a tax on wealth similar to those that exist in most European countries”.

Ms Warren’s plan also includes a tax of 3 per cent on household net worth above $1bn (£801.7m), though it does not offer the sliding scale for increased wealth that Mr Sanders has proposed.

Mr Sanders takes the idea of taxing the richest Americans to fund his programmes a step further, however, sharply reducing the total wealth of US billionaires over a 15-year period.

“This proposal does not eliminate billionaires, but it eliminates a lot of the wealth that billionaires have, and I think that's exactly what we should be doing,” Mr Sanders told the NYT.

His plan is entitled “Tax on Extreme Wealth”. In a statement, Mr Sanders described the plan as part of an effort “to reduce the outrageous level of inequality that exists in America today and to rebuild the disappearing middle class.”

The plan also includes a series of enforcement policies meant to ensure “that the wealthy are not able to evade the tax,” including increased funding to the Internal Revenue Service and requiring IRS audits for all billionaires.

“Under this plan, the wealth of billionaires would be cut in half over 15 years which would substantially break up the concentration of wealth and power of this small privileged class,” Mr Sanders said.