December 7, 2022

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Tax on Serious Millionaires: There is a difference of opinion among Democrats

New York (CNN Business) – Sen of the Democratic Party. Elizabeth Warren faces an uphill battle to persuade Washington to support her proposal on a tax on radical millionaires, starting with convincing her own party treasury secretary.

Janet Yellen, who praised Warren last year as the head of the Treasury Department, fears that implementing a wealth tax would be too complicated.

“So Janet and I need to talk about implementation,” Warren told CNN Business on Monday after introducing his billionaires tax law.

Elizabeth Warren

The bill seeks to raise $ 3 trillion to rebuild the economy and combat inequality, ranging from $ 50 million to $ 1 billion in imposing a 2% annual tax on net worth and trusts. Millionaires will face a 3% tax.

“We designed this wealth tax based on the experiences of other countries that created the wealth tax and have never been successful,” Warren said in an interview. “We looked at where the bugs were and made sure to fix them.”

100 billion to the IRS to fight tax evaders

Critics argue that taxing wealth is challenging unless it is unconstitutional. In particular, there are concerns about how to value assets and prevent the rich from hiding money abroad.

Yellen, the former head of the Federal Reserve, told a dealbook conference last week that he was not planning a wealth tax like Warren because it was “one of the most complex implementation issues”.

“People say, ‘Well, the rich are cheating, so we should not try to use a wealth tax,'” he said. “But just because the rich cheat, does not mean we should be allowed to pay lower taxes than everyone else. . “

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There are teeth in Warren’s estate line.

The law has a built-in audit rate of 30%, meaning that almost a third of all households will be audited each year. The bill seeks to increase the Inland Revenue Service (IRS) budget to $ 100 billion to enhance the agency’s audit capacity and modernize information technology systems.

Warren’s plan proposes a 40% “exit fee” of more than $ 50 million for any U.S. citizen who relinquishes their citizenship to avoid paying taxes.

“Once you implement the wealth tax, it is not very difficult to monitor it annually. If someone owned real estate last year, they own the same real estate this year or have a lot of money from the sale, ”Warren said.

Role in the tax system

When asked if President Joe Biden had any interest in the wealth tax, White House Press Secretary Jen Zhaki told a news conference Monday that Biden “firmly believes that serious millionaires and companies should finally start paying enough.”

“You have been given a lot of ideas and when we get to that place on our schedule you will be eager to work [Warren] And others in Congress, ”Zaki said.

In other words, the White House did not reject it.

Last year, Warren says, 99% of lower-income families paid 7.2% in taxes on their total wealth. However, only one-tenth of the above 1% paid taxes on only 3.2% of their estate.

Warren said there was bipartisan support for the wealth tax among voters, including a majority of independents and Republicans.

“They understand how unfair the current system is,” he said.

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The struggle for the minimum wage is $ 15

Warren backs an attempt to overthrow the Senate MP by having a minimum 15 minimum wage increase in the Govt aid package. Such a measure has not been used since 1975, and Sen. Support among moderate Democrats such as Joe Munch is likely to decline.

“I’m glad we’ve passed the minimum wage through reconciliation,” Warren said, referring to the budget process, which requires only a simple majority to pass. I will fight for it.

When asked about Manzin and other moderates who oppose popular measures such as the Man 15 minimum wage, Warren focused on Democrat agreements.

“Democrats want us to raise the minimum wage,” he said. “We need to talk more about what the situation is and how to do it, but we want the minimum wage to rise.