Reed & Whitehouse Help Unveil the Billionaires Income Tax Act to Ensure Billionaires Pay Their Fair Share

WASHINGTON, DC - In an effort to ensure fairness in the U.S. tax system and crack down on tax avoidance techniques by billionaires, U.S. Senators Jack Reed (D-RI) and Sheldon Whitehouse (D-RI) are teaming up with U.S. Senator Ron Wyden (D-OR) to reintroduce the Billionaires Income Tax Act (S.2845).

This legislation would help ensure billionaires pay a fair share in annual taxes just like Americans who work for a living already do. The bill would prevent billionaires and those who receive over $100 million in three consecutive years from hiding their money from taxation and saddling hardworking taxpayers with the high costs of tax avoidance.

"While people like nurses and firefighters pay taxes straight out of every paycheck, there's a thicket of little-known tricks and accounting rules that allow billionaires to opt out of paying a fair share of tax on the income they enjoy," Senator Wyden said. "Billionaires and Republicans are going to offer up the same set of trickle-down arguments to pretend this proposal would bring about the end of western civilization. The only time you hear billionaires claim they can't scrounge together any cash is when somebody brings up taxes, and odds are a lot of these mega-wealthy individuals are crying poverty from their yachts and private islands. This is a carefully designed proposal that draws on accounting methods already used in the tax code and raises revenue without increasing any tax rates."

"Under President Trump, more Americans are struggling to afford healthcare, housing and groceries, and they rightfully believe our economy and our tax system are wildly skewed to favor the ultra-wealthy Americans," said Senator Reed. "While millions of Americans pay taxes directly from their paycheck each month, billionaires with an armada of accountants are able to shield their wealth from taxation and pay a much lower tax rate on their earnings and wealth than the typical, hardworking family. Our bill fixes this disparity and ensures that billionaires pay their share of taxes just like everyone else. American families deserve no less."

"Billionaires shouldn't pay lower tax rates than teachers and firefighters," said Senator Whitehouse, a member of the Senate Finance Committee. "I'm a strong supporter of Senator Wyden's legislation to begin leveling the playing field for the middle class and put our democracy on a stronger path."

The Billionaires Income Tax would expand on an accounting method already used in the U.S. tax code to ensure billionaires pay a fair share. It would not increase tax rates. The proposal would apply to fewer than 1,000 taxpayers and raise more than $500 billion, which could be used to help shore up funding for vital programs like Social Security and Medicare. Only taxpayers with more than $100 million in annual income or more than $1 billion in assets for three consecutive years would be covered by the proposal. It would not affect middle income taxpayers in any way.

In addition to Wyden, Reed, and Whitehouse, the legislation is cosponsored by U.S. Senators Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Tina Smith (D-MN), Ben Ray Luján (D-NM), Peter Welch (D-VT), Angela Alsobrooks (D-MD), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Tammy Duckworth (D-IL), John Fetterman (D-PA), Martin Heinrich (D-NN), Mazie Hirono (D-HI), Edward J. Markey (D-MA), Jeff Merkley (D-OR), Chris Murphy (D-CT), Patty Murray (D-WA), Brian Schatz (D-HI), and Chris Van Hollen (D-MD).

The Billionaires Income Tax is also endorsed by over 100 supporting organizations. A letter of endorsement with the full list of supporting organizations can be found here.

On the House side, Congressman Steve Cohen (TN-9) and Congressman Don Beyer (VA-8) introduced companion legislation, making this the first Congress in which the Billionaires Income Tax is a bicameral proposal.