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WASHINGTON — Sen. Bernie Sanders, I-Vt., released a bill Thursday that would drastically increase the estate tax for multimillion-dollar inheritances, becoming the second potential 2020 presidential candidate this week to propose major new taxes on the ultra-wealthy.
Increasing the tax burden on the rich to fund new social spending or lower-income tax cuts is fast becoming a major theme of the Democratic presidential contest, with candidates targeting investments, inheritances and wealth.
Under Sanders' “For the 99.8 Percent Act,” so named because it would only apply to the richest 0.2 percent of Americans, the estate tax would rise to 45 percent on estates worth $3.5 million to $10 million; 50 percent on estates $10 million to $50 million; 55 percent on estates over $50 million; and topping out at 77 percent on $1 billion-plus fortunes.
"Our bill does what the American people want by substantially increasing the estate tax on the wealthiest families in this country and dramatically reducing wealth inequality," Sanders said in a statement. “From a moral, economic, and political perspective, our nation will not thrive when so few have so much and so many have so little."
The bill sets up a potential general election contrast with President Donald Trump, who cut taxes on large inheritances by doubling the size of estates that are exempted before the current 40 percent rate kicks in. It now applies only to estates larger than $11.2 million and $22.4 million for couples. Senate Majority Leader Mitch McConnell, R-Ky., introduced a plan this week with a group of Republican senators that would go further and repeal the tax entirely.
Release of the Sanders plan also comes just days after Sen. Elizabeth Warren, D-Mass., who is also considering a presidential run, proposed an "ultra-millionaire tax" that would impose a 2 percent annual tax on fortunes over $50 million and 3 percent on fortunes over $1 billion.
Both the Sanders and Warren bills were released with public backing from some of the same economists, University of California, Berkeley, professors Emmanuel Saez and Gabriel Zucman, who are known for their work on inequality. The French economist Thomas Piketty also endorsed Sanders' bill in a statement provided by the senator along with former Labor Secretary Robert Reich and Darrick Hamilton, the executive director of the Kirwan Institute for the Study of Race and Ethnicity, who has consulted on a variety of proposals among Democrats in the mix for 2020.
CORRECTION (Feb. 2, 2019, 2:08 p.m., ET): A previous version of this article misstated Darrick Hamilton's title and employer. He is executive director of the Kirwan Institute for the Study of Race and Ethnicity, not a professor at the New School.