A group of progressive lawmakers in the House have introduced a bill that would levy up to an 8 percent tax on the wealth of the richest Americans, with a goal of combating extreme and growing wealth inequality in the U.S.
The bill, dubbed the Oppose Limitless Inequality Growth and Reverse Community Harms (OLIGARCH) Act, would levy a wealth tax on individuals who have at least 1,000 times median household wealth. There would be four tax brackets under the bill that progressively levy a higher tax the more wealth an individual holds.
Representatives Barbara Lee (D-California), Summer Lee (D-Pennsylvania), Jamaal Bowman (D-New York) and Rashida Tlaib (D-Michigan) introduced the bill with six cosponsors in the House.
“Inequality in the United States is worse in 2023 than it was during the Gilded Age. It is unacceptable that millions of hardworking people remain impoverished, while the top 0.1 percent hold over 20 percent of the nation’s wealth,” Barbara Lee said in a statement. “The OLIGARCH Act is the solution we need to close the exorbitant wealth gap in America and create a tax system where everyone pays their fair share.”
The bill would levy a 2 percent tax on wealth between 1,000 and 10,000 times median household wealth; a 4 percent tax on wealth between 10,000 and 100,000 times median wealth; a 6 percent tax on wealth between 100,000 and 1 million times median wealth; and an 8 percent tax on all wealth over 1 million times median wealth.
Currently, median household wealth is about $120,000, according to bill sponsor Patriotic Millionaires. This means that the 2 percent tax would roughly apply to wealth between $120 million and $1.2 billion, while the 8 percent tax would apply to wealth over $120 billion. If the median household wealth changes in the future, the bill’s wealth brackets would scale accordingly.
This would affect an exceedingly small number of people, but could represent a first step toward closing wealth inequality. According to a fact sheet about the bill by Patriotic Millionaires, in 2019, about 0.025 percent of American adults had wealth in excess of 1,000 times median wealth. In 2021, only two Americans had wealth exceeding 1 million times median wealth.
“The tax we propose would fall exclusively on those with what we consider ‘runaway wealth’ — wealth so great that factors like living expenses that ordinarily serve as natural constraints on wealth accumulation have virtually no impact,” the group wrote.
The OLIGARCH Act would work to ensure that its wealth tax is enforced by requiring that the Internal Revenue Service (IRS) audit at least 30 percent of the households subject to the tax.
Indeed, wealth inequality has been on the rise for decades, with the top 1 percent controlling more wealth than the bottom 50 percent combined, according to data from the Federal Reserve. Meanwhile, there are essentially no safeguards preventing the wealthiest Americans from accumulating yet more wealth, with a tax system created to favor corporations and the rich — due in large part to wealthy people’s widespread influence over U.S. politics.
The lawmakers cited a statistic created by political scientists, who found in 2009 that the 400 richest Americans had on average 22,000 times the political power of the average person in the bottom 90 percent, while the richest 100 had nearly 60,000 times the power.
Such power is currently evident in recent revelations about Supreme Court justices, for instance, as reporters have uncovered the vast influence that billionaires have over the Court and its decisions. It is also evident in the fact that billionaires are only getting richer and richer as they spend more and more on elections due to Citizens United.