(Bloomberg) Some of the richest people in the U.S. are calling for a federal wealth tax.
Financier George Soros, heiresses Liesel and Regan Pritzker, Abigail Disney and Facebook Inc. co-founder Chris Hughes are among those calling for the levy to help address income inequality and provide funding to address climate change and public health issues.
“We are writing to call on all candidates for President, whether they are Republicans or Democrats, to support a moderate wealth tax on the fortunes of the richest one-tenth of the richest 1% of Americans -- on us,” according to a letter signed by 19 individuals -- one anonymously -- and posted online Monday. “The next dollar of new tax revenue should come from the most financially fortunate, not from middle-income and lower-income Americans.”
Democratic presidential candidates Elizabeth Warren, Pete Buttigieg and Beto O’Rourke support the idea, according to the letter. Warren has proposed a 2% tax on assets of $50 million or more, and a further 1% on assets over $1 billion. It is estimated to generate nearly $3 trillion in tax revenue over 10 years.
The wealth tax isn’t embraced by all Democrats because many believe it would be difficult to assess objectively the value of wealth like artwork and jewels. There are also concerns that such a tax is unconstitutional because the federal government is prohibited from taxing property, only income.
European countries have experienced mixed results with a wealth tax. Of 15 nations in the Organization for Economic Cooperation and Development that had them in 1995, only four -- Switzerland, Belgium, Norway and Spain -- still do. France, Sweden and Germany are among those that backed away from the levy because of the difficulties implementing them.
Some of those signing the letter have already expressed concerns about rising inequality. Hughes has evangelized for higher taxes on the rich in his book “Fair Shot.” Disney, whose grandfather and great-uncle founded Walt Disney Co., recently called Chief Executive Officer Bob Iger’s $65.6 million compensation package “insane.”
The New York Times reported on the letter earlier Monday.
Another signatory, entrepreneur Nick Hanauer, first warned his “fellow zillionaires” about the country’s growing wealth divide in 2014, writing that “there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out.”
Such inequality has only deepened. Last week, Bernard Arnault joined Jeff Bezos and Bill Gates as the third person with a fortune of at least $100 billion on the Bloomberg Billionaires Index, whose 500 members have a total net worth of $5.5 trillion, up from $4.9 trillion two years ago.