Jeff Bezos would pay more than $5bn a year under Warren’s ‘Ultra-Millionaire’ tax plan

Amazon founder saw his wealth rise by around $75bn in 2020

Amazon founder Jeff Bezos would be forced to pay more than $5m (£3.57m) in taxes under the Ultra-Millionaire Tax Act proposed by US politicians earlier this week.

On Monday, several senators including Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont, unveiled a proposed wealth tax to help reduce inequality in the US.

The proposed tax would include a 2 per cent levy annually on wealth that totals more than $50m (£35m) and 3 per cent on wealth of more than $1bn (£714m).

Ms Warren said on Monday that the tax is predicted to raise around $3 trillion (£2.1 trillion) over a ten-year period, and would only affect 100,000 of the wealthiest families in the US, which amounts to around 0.05 per cent of the population, according to CNBC.

Calculations from the Institute for Policy Studies and Americans for Tax Fairness following the announcement of the tax proposal, said that Mr Bezos, the world’s richest person, would have paid $5.7bn (£4.075bn) in 2020 under the plan.

The analysis claimed that despite the high-level of tax, Mr Bezos would still have been left with a net worth of around $185bn (£132bn). Although the coronavirus pandemic caused record unemployment figures in the US in 2020, Mr Bezos saw his wealth rise by around $75bn (£54bn).

Tesla CEO Elon Musk would have been taxed around $4.6bn (£3.2bn), Microsoft co-founder Bill Gates would have had to pay $3.6bn (£2.5bn) and Facebook CEO Mark Zuckerberg would have been charged around $3bn (£2.1bn) under the proposal in 2020.

Speaking to CNBC about the plan on Tuesday, Chuck Collins, director of the Program on Inequality of the Institute for Policy Studies, said that the tax could have a direct impact on Americans and help offset inequality faced during the pandemic.

“The wealth tax on billionaires alone would fund almost three-quarters of President [Joe] Biden’s entire $1.9 trillion (£1.3 trillion) pandemic rescue package, currently pending before the Senate,” Mr Collins said.

Although critics of the proposal have claimed that it would be an administrative challenge, Ms Warren told CNBC that “the implementation part is really a lot easier than it looks.”

The senator added: “This version of the wealth tax covers all of your property. It doesn’t matter if it’s held in stock or in real estate or in racehorses.

“Everything is covered, so there’s no point in moving property around. Also wherever you hold, it is covered, whether you hold it here in the US, whether you hold it in the Cayman Islands.”

In order to combat evasion, the tax would include a 40 per cent “exit tax” for those who try to renounce their citizenship and move to another country to avoid paying what is owed.

Last month, state legislators in Washington introduced a bill that would impose a 1 per cent tax on wealth of more than $1bn (£725m), as part of efforts to offset Washington’s lack of an income tax.

The tax, which would not apply to financial investments like stocks or options, would raise a majority of its money from four billionaires who live in the state, including Mr Bezos.

Jared Walczak, the vice president of state projects for state tax policy at the Tax Foundation, estimated that around 97 per cent of the tax revenue would come from Mr Bezos, his ex-wife MacKenzie Scott, Mr Gates and Microsoft CEO Steve Ballmer.

Mr Bezos would owe around $2bn (£1.4bn) a year, his ex-wife would be taxed around $600m (£435m), Mr Gates, who has a fortune of $135bn (£97bn), would need to pay $1.3bn (£943m) and Mr Ballmer would be taxed $870m (631m) under that proposal.