Reigniting a decades-old debate, President Joe Biden recently called for a wealth tax on the world's super-rich. Biden said, if reelected in November, he would impose a new "billionaire tax" -- a 25% tax on Americans with a wealth of more than $100 million. During the State of the Union, he stated: "No billionaire should pay a lower tax rate than a teacher, a sanitation worker, a nurse."
Global finance ministers recently meeting for a G20 summit in Brazil said they were exploring plans for a global minimum tax on the world's 3,000 billionaires to ensure the super-rich 0.1% pay their fair share to society. Such ideas have the backing of some of the world's wealthiest, according to published reports.
In early 2024, a growing network of so-called Patriotic Millionaires signed an open letter to world leaders, calling for higher taxes for the wealthy.
This week, a group of 23 high-income and wealthy Vermonters sent an open letter to lawmakers, asking them to increase taxes on the wealthy.
Legislators are considering a bill to enact a 3% surcharge on personal annual income above $500,000, which would raise at least $74 million in state revenue each year. Tuesday's letter stated explicit support for the proposal, as well as efforts to study legislation to tax unrealized gains of high-net-worth individuals. The group also supports conversations in the legislature to design a proposal for a modest tax on unrealized gains for taxpayers with over $10 million in assets.
The group includes Ben Cohen and Jerry Greenfield of Ben & Jerry's Ice Cream; Olympic cross-country skier Hannah Dreissigacker; Phoenix Books co-owner Renee Reiner; green energy entrepreneurs Duane Peterson and David Blittersdorf, and others.
The letter "stressed the importance of public investment and their willingness to contribute more in taxes to fund public investments necessary to improve the quality of life for all Vermonters," according to an accompanying news release.
What follows are excerpts from the letter:
"As Vermont taxpayers and community members, we recognize the urgent moment we face. We see an acute housing crisis, chronic underfunding of state services, and a need for immediate investments in our infrastructure and environmental protection. At the same time, as Vermonters who have economically prospered in our state, we believe in contributing our fair share to build a state that works for all people who live here."
It goes on: "We support the Fair Share for Vermont proposals to increase taxes on the wealthiest Vermont residents, and we are willing to pay additional taxes to raise revenue for fundamental government services. We recognize that through public investment, we can improve the quality of life for all people."
Furthermore, it states, "Vermont is defined by its community spirit. Here in Vermont, we take care of our neighbors and form close relationships that transcend economic circumstances. Public investment, funded through tax revenue, is necessary to amplify these community efforts and fund programs that strengthen our communities. ... We call on the legislature to make fiscally responsible choices to ensure that we are addressing the needs of our residents and ensuring that our state's revenues are strong and sustainable. And we think it's important for Vermonters -- especially our state legislators -- to know that many of the people who will pay these taxes support them."
Signatory Susanna Penfield, of Strafford, noted, "When wealthy people maintain and accumulate wealth far beyond their own needs it comes at the cost of those in our neighborhoods, schools, towns -- as well as at the cost of a sustainable future that will benefit us all."
There is no question, such wealth taxes would have an effect. Global wealth inequality has risen significantly over recent years, with the richest 1% holding two-thirds of all new wealth created since 2020, according to Oxfam. (It's also a statistic we have heard repeatedly from our own U.S. Sen. Bernie Sanders.) The poorest 50% of the global population now own just 2% of total net wealth, while the richest 10% hold 76%. Of that, the wealthiest 1% own around two-thirds.
Under Biden's proposals, a 25% tax on those with more than $100 million would raise $500 billion over 10 years to help fund benefits such as child care and paid parental leave. That would lift the average tax rate for America's 1,000 billionaires from 8.2% and bring it in line with the 25% paid by average American workers. Even a 2% tax on the world's 2,700 or so known billionaires could raise $250 billion per year, according to a 2023 report from the independent research lab EU Tax Observatory, which backs calls for a global wealth tax.
A separate Oxfam report in 2023 recently suggested a 5% tax on the world's multimillionaires and billionaires could raise $1.7 trillion annually -- enough to lift 2 billion people out of poverty.
Add to the mix a 2024 poll by Patriotic Millionaires that found that more than half (58%) of millionaires from G20 countries back a 2% tax on wealth over $10 million. Three-quarters (74%) said they support higher taxes on the wealthy in general.
The letter to lawmakers was a pleasant surprise. A fairer share would go a long way.
"People like us value our state's public investments and quality of life," the signatories wrote. "We love living in Vermont and appreciate the public good that taxes provide. ... We want our state to work for all Vermonters, and we want to contribute our fair share to make it happen."
-- Rutland Herald. March 20, 2024.