(CN) – Democratic presidential hopeful Senator Bernie Sanders released a new plan Tuesday to tax the “extreme wealth” of the top 0.1% of U.S. households, which he says would help pay for his flagship Medicare for All health care proposal.
Sanders’ plan pushes past Democratic rival Senator Elizabeth Warren’s wealth tax plan and would apply to those worth over $32 million. The plan is expected to generate $4.35 trillion in revenue over the next decade, according to analysis from economics professors Gabriel Zucman and Emmanuel Saez of the University of California, Berkeley.
It would place a 1% tax on all wealth above the first $32 million. At $50 million, that tax increases to 2% and jumps to 3% on wealth beyond $250 million. The brackets max out at 8% on all wealth beyond $10 billion.
The Vermont senator’s plan would also require the federal government to annually assess the net worth of the wealthiest Americans.
The proposal would create a wealth registry to crack down on tax evasion. IRS funding would also be increased to support audits for 30% of all tax filings from the top 1% bracket. All filings from those worth $1 billion or more would be automatically audited.
Warren introduced a similar plan earlier this year as part of her presidential campaign. Under her plan, all wealth above $50 million would be taxed at 2%. Wealth above the first $1 billion would be taxed at 3%.
Zucman and Saez, who also provided analysis to the Warren campaign for her wealth tax plan, supported Sanders’ plan as a means to reduce the number of billionaires in the country.
“The Sanders wealth tax would reduce the wealth of the typical billionaire in half after 15 years relative to a situation with no wealth tax,” the economists said in a joint letter released Sunday. “This would substantially break up the concentration of wealth and power of billionaires.”
The revenue raised under the plan would be used to fund Sanders’ affordable housing plan, universal childcare and Medicare for All.
Saez and Zucman estimate Sanders’ wealth tax would affect 180,000 households in the country, compared to 75,000 under Warren’s plan. Her proposal would generate about $2.75 trillion over a decade, they said.
The U.S. Census estimates that as of 2018, there are 127.6 million households in the country.
The Tax Foundation, a Washington, D.C.-based think tank that is generally critical of higher taxes, had to yet to fully analyze Sanders’ plan by Tuesday afternoon, but it was skeptical toward Warren’s plan, specifically noting that it would be difficult to properly assess the full assets of the wealthiest Americans since much of that wealth is in investments like real estate and stocks that can fluctuate year to year.