Bernie Sanders' $3,000 Payment Plan: Who Qualifies And How It Would Work

While the exodus of billionaires from California continues amid fears of a wealth tax in the Golden State, Senator Bernie Sanders and Democratic representative Ro Khanna of California floated the 'Make Billionaires Pay Their Fair Share Act' to levy a new 5% wealth tax on all 938 billionaires across the US.

A 5% tax on these billionaires for redistribution among the masses could positively impact 90% of Americans, according to Sanders. He believes these billionaires are collectively worth $8.2 trillion, and a 5% yearly tax would generate sufficient money to send $3,000 to every American who meets specific income thresholds. According to the proposal, a family of four could receive a payout of $12,000.

Interestingly, the money generated from taxing the wealthy could also boost Medicare coverage, inventory of affordable housing and strengthen Medicaid for seniors while subsidising childcare for some families.

$4.4 Trillion Worth of Collections Over the Next Decade

Sanders' bills would levy a 5% annual tax on the wealth of any US household with a net worth of over $1 billion. Economists Emmanuel Saez and Gabriel Zucman believe that such a tax would raise $4.4 trillion over the next decade.

The small group of billionaire taxpayers would also make it easier to track and audit their finances for compliance. However, the economists expect some level of noncompliance to persist, explaining that 10% of the tax owed would go unpaid due to tax evasion strategies.

In all, the law would raise $368.5 billion annually, accounting for 25% of the $1.5 trillion defense budget US President Donald Trump proposed for 2027.

As per the proposed legislation, funds raised from the tax would initially deliver a $3,000 paycheck to every individual, and the remainder would be used to undo recent cuts to the Affordable Care Act, build seven million affordable homes, expand Medicare coverage, and fix a $60,000 floor on annual salaries for public school teachers.

Income Thresholds to Qualify for $3K Checks

To qualify for Sanders' proposed bill of a one-time payment, households must have annual incomes of under $150,000. The census release of CPS ASEC data shows that one-third of American households earn more than the threshold, meaning that the remaining two-thirds would qualify for the one-time credit.

The bill has not yet been voted on by the House or Senate, and it is unclear whether the proposed law will advance in Congress.

'Let me tell you how insane the level of wealth inequality is in America today. If this legislation had been enacted last year, Elon Musk would have owed $42 billion more in taxes, leaving him with just $792 billion to survive,' Sanders wrote in a Guardian op-ed. 'Mark Zuckerberg would have owed $11 billion more, leaving him with a meager $209 billion to feed his family. Jeff Bezos would also have owed about $11 billion more, leaving him with just $207 billion to put a roof over his head.'

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