Not Just Billionaires: Now Democrats Want To Hit Millionaires With 10% Surtax

With 2020 Democratic candidates Elizabeth Warren and Bernie Sanders threatening to separate billionaires from their money, two other Democrats have proposed tax hikes that would hit the wealthy with a 10% surtax on income above $2 million according to Bloomberg.

Introduced by Maryland Democrat Sen. Chris Van Hollen and Rep. Don Beyer of Virginia, the new plan would raise the effective top rate on wages to 47%, while capital gains would taxes would top out at 33.8%. The proposal "could raise $635 billion over 10 years," according to surtax.org.

Van Hollen calls it "a simple system to ensure the wealthy are doing their part to invest in strengthening America’s future for everyone."

The idea is the latest in a long string of Democratic plans to make wealthy Americans pay more. But with 2020 presidential candidates and members of Congress envisioning expensive programs to reshape U.S. health care, confront climate change, and offer free college educations there has been a greater urgency to find ways to finance these ambitions -- and that involves higher taxes on the rich.

The arsenal of proposals includes wealth taxes, financial transaction levies and capital gains changes.

The Van Hollen-Beyer surtax would raise about $635 billion over a decade, according to projections from the Urban-Brookings Tax Policy Center. By comparison, Senator Elizabeth Warren, one of the party’s leading presidential candidates, estimates that her wealth tax would raise $3.75 trillion over 10 years. -Bloomberg

The surtax is being framed as a more moderate approach of raising taxes on the top 0.2% of taxpayers, or around 329,000 Americans, and could be legislatively piggybacked on top of the existing tax code - which would make it easier for a Democratic-controlled Congress to pass under the next Democratic president.

"This is something moderates can support," said Frank Clemente, executive director of Americans for Tax Fairness. "I don’t think we are going to see a wealth tax anytime soon."

Warren's plan would impose a 2% levy on fortunes over $50 million and 6% on those above $1 billion, while Sanders' plan would kick in a $32 million in assets and would top out at 8%.