Two economists from the University of California, Berkeley claim that billionaires could face up to a 97.5 percent average effective tax rate under Democratic presidential candidate Sen. Bernie Sanders’ (I-VT) proposed plan. The rate is higher than any other proposal from a Democratic presidential candidate.
“With the wealth tax, you get directly at the stock instead of hitting the flow of income, making it a much more powerful de-concentration tool than income taxes,” Emmanuel Saez, one of the professors, told Bloomberg.
Sanders’ plan could cut the number of billionaires in the U.S. by half within 15 years, according to the report.
The senator’s plan proposes a one percent levy on households worth more than $32 million and tax rates up to eight percent for those worth more than $10 billion.
Sanders’ plan kicks in for fortunes worth less compared to Sen. Elizabeth Warren’s (D-MA) plan. Warren’s plan increases the wealth tax up to three percent for households worth more than $1 billion, while Sanders’ plan tops at eight percent.