FOR IMMEDIATE RELEASE: August 1, 2019
DE BLASIO CAMPAIGN UNVEILS FARTHEST REACHING TAX PLAN OF 2020 CAMPAIGN
Graduated wealth tax on all assets over $10 million expected to raise over $3 trillion alone over 10 years; initial estimates say entire plan will raise upwards of $10 trillion over next decade
NEW YORK—Mayor de Blasio yesterday unveiled a bold new tax plan that would go farther than any other 2020 candidate to rein in runaway inequality, including the most aggressive wealth tax proposal of any candidate in the field.
“There’s plenty of money in this country – it’s just in the wrong hands,” said New York City Mayor and 2020 Presidential Candidate Bill de Blasio. “A democratic society can’t survive in the face of such extreme inequalities in wealth and income, and solving that problem means that the very wealthiest Americans and corporations who have skated by for too long need to face a new reality. We need fundamental change both in society and our tax code, and my tax plan is the only plan in the Democratic field that faces up to the scale of the challenges we face.”
Thanks to a concerted, decades-long, far-right agenda that has concentrated wealth in the hands of the richest Americans and big corporations at the expense of working people, income inequality has ballooned to the point where it is not just the sign of a flawed economy, but a threat to the fabric and stability of our country. The nation’s top 1% own 40% of the nation’s wealth. Three dynastic American families – the Kochs, the Waltons, and the Mars families – have seen their wealth increase nearly 6,000% since 1982, while median household wealth has fallen by 3% during that time.
If our nation continues on its current trajectory, things won’t get any better: millennials are expected to be the first generation in American history to earn less than their parents. And far too many Americans are struggling simply to access basic services – higher education tuition is increasingly out of reach, health care is still unaffordable for millions of Americans, and the social safety net continues to erode.
Radical change is clearly required to solve the stark income and wealth disparities in our country. While many of these revenue estimates are preliminary figures, it is clear that the de Blasio Fair Share Tax Plan will not just raise revenues but restructure society.
The de Blasio Wealth Tax
A de Blasio Administration would institute the largest wealth tax of any 2020 candidate and treat massive income inequality not only as a sign of an unhealthy economy, but also as a threat to the stability and security of our democracy. The plan would place a graduated tax on assets starting at $10 million. All assets between $10 million and $25 million would be subject to an annual tax of between 1%, assets between $25 million and $100 million would be taxed at an annual rate of 2%, and all assets above that would be taxed at an annual rate of 3%. To prevent capital flight, the de Blasio Administration would also implement a “turncoat tax” of up to 40% on assets above $50 million for those who renounce their U.S. citizenship in order to avoid paying their fair share. The de Blasio wealth tax is expected to raise at least $3 trillion over 10 years.
The de Blasio Millionaires Tax
Recent studies have shown that top cumulative tax rates for the ultra rich when federal, state, and local taxes are taken into account could be as high as 70% without harming our economy. The de Blasio Administration would raise the top current tax bracket up to 40%, and then institute two new income tax brackets on high earners — a 50% tax bracket on income between $1 million and $2 million annually, and a 60% bracket on income above that level. When combined with state, local, and other taxes, top cumulative tax rates would once again approach 70%, as they did for decades prior to Ronald Reagan’s tax cuts. The plan would end the practice of allowing wealthy investors to pay a lower tax rate on capital gains than ordinary working families pay on their income. Under de Blasio’s proposal, income from capital gains will be taxed as ordinary income. Initial estimates suggest this could raise as much as $3 trillion, if not more, over the next ten years.
The de Blasio Wall Street Sales Tax
While working families pay sales taxes on everything from food to clothing, Wall Street traders can buy and sell stocks and other financial instruments without any tax. The de Blasio tax plan would level the playing field by establishing a 0.2% transaction tax on stock, bond or derivative trades, targeting high frequency traders and reducing volatility in the markets. The transaction tax is estimated to raise roughly $1.5 trillion in ten years.
The de Blasio Corporate Tax
Corporate America is enjoying record profits, sky-high stock prices—and the lowest taxes in generations. Trump and the Republicans gave corporate America a massive giveaway, cutting their taxes by 40%. Using exemptions and loopholes, many large multinational corporations pay an effective tax rate that is far lower. Sixty Fortune 500 companies paid zero federal income taxes in 2018.
The de Blasio plan would restore the corporate tax rate to 35%, where it was before Trump’s tax cuts were enacted. Additionally, the de Blasio Administration would re-institute the corporate Alternative Minimum Tax (AMT) gutted by members of both parties in the deregulatory wave of the 1990s, thereby stopping companies like General Electric from using loopholes and accounting tricks to drive their effective tax rate to zero. Lastly, the plan would equalize tax rates on profits earned offshore to remove perverse incentives for U.S. companies to move production offshore and crack down on corporate “inversions” and other schemes that allow U.S. companies to pay lower taxes on foreign profits. These changes to the corporate tax code are estimated to bring in approximately $1.3 trillion over 10 years.
The de Blasio Fair Share Tax Plan features several other pieces, including:
The de Blasio Personal Alternative Minimum Tax
A stronger AMT would prevent wealthy individuals from lowering their personal income tax rate through excessive loopholes and accounting tricks. It would be estimated to raise approximately $425 billion over 10 years.
The de Blasio Tax on Heirs and Heiresses
The growth of financial dynasties in America means that the scions of the wealthiest families aren’t just getting a leg up — they’re facing an entirely different reality from the vast majority of working people. To change this dynamic, the de Blasio Administration would replace the estate tax with a tax on inheritors’ windfalls. Heirs of inheritances over $1,000,000 would pay tax on the inheritance as income.
While estimates are preliminary, this proposal could raise as much as $500 billion, and possibly more, over the course of a decade.
The de Blasio Plan to Close Special Interest Loopholes
Too often, the wealthiest Americans and big corporations play by a separate set of rules, taking advantage of massive loopholes intended for small businesses and the middle class. The de Blasio tax plan would end these accounting gimmicks, including: (1) the “pass through” loophole worth roughly $385 billion over 10 years; (2) loopholes used by business owners that have mischaracterized the nature of their income to avoid paying health care taxes, which are worth at least $160 billion; (3) loopholes that corporations use to avoid paying taxes by paying executives using stock options, worth $45 billion; and (4) loopholes for wealthy real estate investors like Donald Trump that total $65 billion.
The de Blasio Bank Excess Risk Tax
Irresponsible financial institutions didn’t just cause the last financial crisis – many of them used the chaos of the crisis to get even bigger, and still have uninsured liabilities to this day. To hedge against another crisis, the de Blasio plan would institute a fee of .15% on their loans that are deemed risky. This would raise approximately $100 billion in the next decade.
The de Blasio CEO Pay Ratio Tax
Pay gaps between CEOs and ordinary workers have ballooned. CEOs for S&P 500 companies have seen their pay rise by $5.2 million over the last decade, while rank-and-file workers have seen their pay increase by just $7,850. The pay ratio tax would increase corporate tax rates by 0.5% for firms that pay their CEOs more than 100 times the median employee salary, and by 3% for companies that pay their CEO 400 times the median wage. This tax will bring in roughly $80 billion over 10 years.
All told, the de Blasio tax plan will raise upwards of $10 trillion over the course of the next decade.
More information about the de Blasio tax plan can be found here or on taxthehell.com.