MANCHESTER, NH - JANUARY 12:  Sen. Elizabeth Warren (D-MA), speaks during a New Hampshire organizing event for her 2020 presidential exploratory committee at Manchester Community College on January 12, 2019 in Manchester, New Hampshire. Warren announced on December 31 that she was forming an exploratory committee for the 2020 presidential race.  (Photo by Scott Eisen/Getty Images)
Scott Eisen/Getty Images
MANCHESTER, NH - JANUARY 12: Sen. Elizabeth Warren (D-MA), speaks during a New Hampshire organizing event for her 2020 presidential exploratory committee at Manchester Community College on January 12, 2019 in Manchester, New Hampshire. Warren announced on December 31 that she was forming an exploratory committee for the 2020 presidential race. (Photo by Scott Eisen/Getty Images)
Now playing
01:57
Elizabeth Warren to propose new 'wealth tax'
CNN
Now playing
02:58
Avlon: This shows that crazy has a constituency
CNN
Now playing
07:27
CNN anchor pushes back on Texas state lawmaker's defense of voting bill
CNN
Now playing
01:12
Tapper asks Buttigieg for infrastructure plan timeline
Now playing
02:48
GOP governor calls Trump's RNC remarks 'divisive'
WASHINGTON, D.C. - APRIL 19, 2018:  The U.S. Supreme Court Building in Washington, D.C., is the seat of the Supreme Court of the United States and the Judicial Branch of government. (Photo by Robert Alexander/Getty Images)
Robert Alexander/Getty Images
WASHINGTON, D.C. - APRIL 19, 2018: The U.S. Supreme Court Building in Washington, D.C., is the seat of the Supreme Court of the United States and the Judicial Branch of government. (Photo by Robert Alexander/Getty Images)
Now playing
02:39
SCOTUS blocks California Covid restriction on religious activities
rep jim clyburn georgia voting law jim crow sot sotu vpx_00000000.png
rep jim clyburn georgia voting law jim crow sot sotu vpx_00000000.png
Now playing
02:13
Rep. Clyburn blasts GA voting law: It's the 'new Jim Crow'
Joe Manchin
CNN
Joe Manchin
Now playing
02:03
'I never thought in my life ...' Why Manchin won't walk away from bipartisanship
Gaetz speaks to members of the media outside the hearing Michael Cohen, former attorney and fixer for President Donald Trump, testifies at before the House Committee on Oversight and Reform at Rayburn House Office Building February 27, 2019 on Capitol Hill in Washington, DC. Last year Cohen was sentenced to three years in prison and ordered to pay a $50,000 fine for tax evasion, making false statements to a financial institution, unlawful excessive campaign contributions and lying to Congress as part of special counsel Robert Mueller's investigation into Russian meddling in the 2016 presidential elections.
Alex Wong/Getty Images
Gaetz speaks to members of the media outside the hearing Michael Cohen, former attorney and fixer for President Donald Trump, testifies at before the House Committee on Oversight and Reform at Rayburn House Office Building February 27, 2019 on Capitol Hill in Washington, DC. Last year Cohen was sentenced to three years in prison and ordered to pay a $50,000 fine for tax evasion, making false statements to a financial institution, unlawful excessive campaign contributions and lying to Congress as part of special counsel Robert Mueller's investigation into Russian meddling in the 2016 presidential elections.
Now playing
06:11
'Bombastic, antagonistic, unapologetic': A look at Gaetz's political career
Former House Speaker John Boehner attends a ceremony to unveil a portrait of himself on Capitol Hill, Tuesday, Nov. 19, 2019 in Washington.
Michael A. McCoy/AP
Former House Speaker John Boehner attends a ceremony to unveil a portrait of himself on Capitol Hill, Tuesday, Nov. 19, 2019 in Washington.
Now playing
02:42
Boehner says Republican colleague held 10-inch knife to his throat outside House floor
President Joe Biden, accompanied by Vice President Kamala Harris, and Attorney General Merrick Garland, speaks about gun violence prevention in the Rose Garden at the White House, Thursday, April 8, 2021, in Washington.
Andrew Harnik/AP
President Joe Biden, accompanied by Vice President Kamala Harris, and Attorney General Merrick Garland, speaks about gun violence prevention in the Rose Garden at the White House, Thursday, April 8, 2021, in Washington.
Now playing
02:05
Biden calls for ban on assault weapons
CNN
Now playing
02:22
Biden: High-speed internet is infrastructure
AFP/Getty Images
Now playing
03:24
Donald Trump breaks his silence on Matt Gaetz
CNN/WLOX
Now playing
01:43
'He says the quiet part out loud': Borger reacts to GOP election official's remark
AFP/Getty Images
Now playing
02:30
Haberman: Trump had to be talked out of defending Matt Gaetz
CNN
Now playing
03:26
Georgia's Lt. governor says elections law was a result of Trump's misinformation
(CNN) —  

Sen. Elizabeth Warren is proposing a new tax on Americans with assets of $50 million or more as part of a bold new initiative to reverse the increasing concentration of wealth among the country’s richest households.

According to documents provided by Warren’s presidential campaign, the plan would impose a 2% tax on Americans whose net worth exceeds $50 million, with an additional 1% levy on billionaires. It does not specifically address marginal tax rates.

The proposal is among the first and most detailed steps taken by a top-tier Democratic primary hopeful to address what has become, in the aftermath of the 2008 financial crisis and Occupy Wall Street movement, a key issue for the party as a leftward shift that began during the 2016 primary accelerates under President Donald Trump.

Taxing wealth, however, could be very difficult to do. First, there are questions about whether it is permitted by the US Constitution, with legal scholars falling on both sides of the argument. The Constitution gives Congress the power to levy taxes – such as tariffs on commerce. However, it places limitations on so-called “direct taxes,” though the definition of these has long been unclear.

A 19th century Supreme Court ruling struck down a federal income tax that existed at that time. But the 16th Amendment, which was ratified in 1913, established Congress’ right to impose a federal income tax. Also, an early 20th century Supreme Court ruling upheld the ability of Congress to levy an estate tax.

Warren aides told CNN they are confident it would survive any legal challenges posed by questions over its constitutionality. They also believe that, while the bill would be a non-starter in a Republican-controlled Senate, it could be passed via the reconciliation process by Democrats if the party took control of the chamber in 2021 or later. That process requires only a simple majority of voters rather than the 60 most laws need to break a potential filibuster. The aides added that the campaign has not discussed the plan with any other declared or potential presidential hopefuls.

In a pair of letters provided to CNN by Warren’s campaign, 17 signers, including multiple former heads of the Office of Legal Counsel at the Department of Justice, wrote in defense of the plan’s legality.

“Constitutional text and history demonstrate that ‘direct’ tax is best interpreted as a narrow category that would not include a net worth tax (like the one Warren is proposing),” one of the letters states, arguing the plan “falls squarely within Congress’ broad taxing power.”

Gene Sperling, a former National Economic Council director under Presidents Bill Clinton and Barack Obama, tweeted his support for the plan on Thursday afternoon.

“Wealth inequality in our nation is a national scandal. This type of wealth tax that (Sen. Warren) is proposing is essential,” Sperling said. “It frees up dramatic amounts of resources that make it more likely the vast number Americans can have economic security & a shot at their own small nest egg.”

University of California Berkeley economics professors Emmanuel Saez and Gabriel Zucman, who are well known for their work on income inequality and taxing the rich, worked with the Warren team to analyze the proposal, a source confirmed to CNN. The Washington Post first reported on the plan.

Saez and Zucman estimate that 75,000 households – less than the wealthiest 0.1% – would be subject to this wealth tax. That group has a net worth of roughly $9.3 trillion, they estimate. Billionaires are worth an estimated $2.5 trillion. The plan would raise around $2.75 trillion over 10 years and the “billionaire surtax” alone would bring in $25 billion in 2019 from roughly 900 families. Both taxes would raise $212 billion this year.

The professors determined that the plan would raise around 1% of the gross domestic product per year.

“One of the key motivations for introducing a progressive wealth tax is to curb the growing concentration of wealth,” they said in a letter addressed to Warren and provided to CNN.

The top 0.1% of families control about 20% of the nation’s wealth in recent years, up from 7% in the late 1970s, they said. Meanwhile, the share of wealth held by the bottom 90% has fallen to 25% from about 35% in the late 1970s. This is mainly because the bottom 90% has racked up debt, including mortgages, consumer credit and student loans.

Currently, the wealthiest 0.1% of families are projected to pay an average of $3.68 million – or 3.2% of their net worth – in federal, state and local taxes in 2019. The proposed wealth tax would add an extra $1.27 million, bringing the total tax burden to 4.3%, the professors estimate.

The bottom 99% of families have a total tax burden of 7.2% of their wealth. This is because they are mainly taxed on income from their labor, while the rich make money from their wealth and that’s taxed at a lower rate.