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Jeff Bezos' tax payout would be $5.4 billion if the wealth tax proposals put up by progressive Democrats ever pass through into law. Image Credit: Reuters

New York: The 100 richest Americans would hand over more than $78 billion of their personal fortunes under a wealth tax proposed by Democratic Senator Elizabeth Warren and other progressive lawmakers.

Dubbed the 'Ultra Millionaire Tax Act', the bill would require households with a net worth of more than $50 million to pay a 2 per cent tax on their wealth annually, with an additional 1 per cent surtax for fortunes exceeding $1 billion. Warren's proposal is unlikely to go anywhere in a narrowly divided Congress.

Jeff Bezos, the world's richest person, would face an extra tax charge of at least $5.4 billion in 2021 if the bill became law, while Elon Musk would pay $5.2 billion, according to a Bloomberg analysis. The measure would cost Bill Gates an additional $4 billion and Mark Zuckerberg would have to fork over $2.9 billion to cover the tax.

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Elizabeth Warren's wealth tax proposal may not come to pass, but America's rich may still have to shell out more. Image Credit: NYT

Draconian

In 2020, the richest 100 Americans added $598 billion to their wealth, according to the Bloomberg Billionaires Index. The tax would capture 13 per cent of that increase. The bill includes anti-avoidance provisions such as more stringent reporting requirements and a 40 per cent exit tax for wealthy Americans who renounce their citizenship.

While President Joe Biden has proposed higher taxes on corporations and the rich, he and some Democrats in Congress don't support a wealth tax. Opponents of the idea argue it would be difficult to administer and ultimately would be held unconstitutional by a Supreme Court dominated by conservative justices.

About 100,000 families and roughly 1,000 billionaires would end up paying the proposed tax, according to an analysis by University of California at Berkeley economists Emmanuel Saez and Gabriel Zucman. They estimate it would raise about $3 trillion over a decade.