A sweeping new proposal from Sen. Bernie Sanders would impose a 5 percent annual wealth tax on America’s billionaires, a move his office says could generate $4.4 trillion over the next decade and deliver direct financial relief to millions of working households.
The Vermont independent, working alongside Rep. Ro Khanna of California, introduced legislation aimed at narrowing what they describe as a widening economic divide. The measure would target 938 U.S. billionaires who collectively control an estimated $8.2 trillion in wealth.
Under the proposal, the revenue from the annual wealth tax would be used to fund $3,000 direct payments during the first year of enactment to every individual in households earning less than $150,000 annually. Supporters frame the payments as a response to persistent inflation, rising housing costs, and health care expenses.
“We can no longer tolerate a corrupt tax code that enables billionaires to pay a lower tax rate than the average worker,” Sanders said in a statement.
“In a democratic society, we cannot tolerate 60 percent of our people living paycheck to paycheck, struggling to pay for housing, food and health care, while 938 billionaires have become $1.5 trillion richer,” he added.
Beyond direct payments, the legislation outlines several structural changes to federal spending. It would reverse $1.1 trillion in cuts to Medicaid and the Affordable Care Act enacted under President Donald Trump’s One Big Beautiful Bill Act. It also seeks to expand Medicare benefits to include dental, vision, and hearing coverage for millions of seniors — a long-standing priority among progressive lawmakers.
The plan further pledges to cap child care expenses at no more than 7 percent of a family’s income and establish a nationwide minimum annual salary of $60,000 for public school teachers.
Khanna, who represents Silicon Valley and frequently advocates for technology-driven economic growth, described the measure as a balanced approach to inequality.
“We can tax billionaires a modest amount to make sure everyone has a fair chance while keeping our innovative engine,” Khanna said in a statement.
”That is why I am proud to join Senator Bernie Sanders to lead the Make Billionaires Pay Their Fair Share Act,” he added.
The legislation is expected to spark debate in Congress over wealth taxes, federal spending, and long-term deficit impacts. Proponents argue the billionaire tax proposal would rebalance the federal tax code and strengthen middle-class stability, while critics are likely to question its constitutionality, economic impact, and potential effects on investment and capital markets.
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