Bernie Sanders Wants To Tax Billionaires 5% And Give American families $12,000

Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-CA) introduced the Make Billionaires Pay Their Fair Share Act, a bill that would impose a 5% annual wealth tax on the net worth of U.S. individuals with $1 billion or more in assets. The proposal targets approximately 938 billionaires, who collectively hold about $8.2 trillion in wealth, according to the sponsors. No one below the $1 billion threshold would see a tax increase.

The bill, formally S. 3956 in the Senate, would amend the Internal Revenue Code to create a new subtitle imposing the tax on the "net value of assets" held at year-end. This includes real and personal property, tangible and intangible assets worldwide, minus debts. It calls for a federal "registry of ownership" for assets and mandates high IRS audit rates, at least 50%, for affected taxpayers, with 1% of revenue dedicated to enforcement. The threshold would be inflation-adjusted after 2026.

Projected Revenue and First-Year Relief

Economists Emmanuel Saez and Gabriel Zucman, who have advised on similar proposals, estimate the tax would generate $4.4 trillion over 10 years. In the first year, revenue would fund one-time $3,000 direct payments to every individual in households earning $150,000 or less annually. For a family of four, that equates to $12,000, which sponsors say could help with housing, healthcare, childcare, food, and other costs. Subsequent years' revenue would support broader initiatives.

The bill outlines specific spending priorities, including:

• Reversing approximately $1.1 trillion in Medicaid and Affordable Care Act cuts from the "One Big Beautiful Bill Act."
• Expanding Medicare to cover dental, vision, and hearing benefits.
• Building, rehabilitating, and preserving over 7 million affordable housing units to address homelessness.
• Capping childcare costs at 7% of household income.
• Establishing a $60,000 minimum annual salary for public school teachers.
• Expanding home- and community-based services for seniors and people with disabilities.

Sanders framed the proposal as a response to extreme inequality: "Over the past 50 years, $79 trillion in wealth has been redistributed from the bottom 90% to the top 1%," citing Rand Corporation analysis. He noted that billionaires saw their wealth grow by $1.5 trillion in the previous year alone and argued they often pay lower effective tax rates than teachers or truck drivers.

Broader Context

The proposal echoes Sanders' long-standing focus on wealth concentration and builds on state-level discussions, such as wealth tax ideas in California. It highlights ongoing debates about effective tax rates for the ultra-wealthy, the role of unrealized capital gains, and the trade-offs between redistribution and incentives for innovation and investment.

Whether the "Make Billionaires Pay Their Fair Share Act" gains traction as policy or remains symbolic depends on shifting political winds, economic conditions, and legal outcomes. For now, it spotlights deep divisions over how best to address affordability challenges and inequality in the United States. The full bill text and summary are available on Sanders' Senate website.