(CNN)Freshman New York Rep. Alexandria Ocasio-Cortez is going after income, Massachusetts Sen. Elizabeth Warren wants to target wealth, and now Vermont Independent Sen. Bernie Sanders has a third proposal for taxing the very rich: Hit their estates.
New Sanders tax plan targets estates of the ultra-rich
Sanders, who is considering a 2020 presidential run, unveiled a proposal Thursday that would expand the federal estate tax on the wealthiest 0.2% of Americans, imposing a top rate of 77% on estates worth more than $1 billion.
Sanders' bill is the latest call to restructure the tax code to address the dramatic rise in US economic inequality. The increasing and varied levies would raise revenue to pay for new social spending and, more radically, to redistribute wealth -- and power -- across a society where the richest three people in the US, according to a report cited by Sanders, "now own more wealth than the entire bottom half of the American population combined."
The Democratic plans differ in details and emphasis but combine to carve out a stark contrast to the Republican Party's agenda. In its 2017 Tax Cuts and Jobs Act, the GOP lowered income tax rates temporarily on the middle class and permanently for corporations. But it also gave a big gift to the rich by doubling the estate tax exemption, though only until 2025.
Sanders, who is considering a second presidential run, released the details of his "For the 99.8% Act" a week after Warren introduced her own plan to hit the rich with a 2% "wealth tax" on assets over $50 million and an additional 1% levy on households with a net worth of more than $1 billion. Her plan would target about 75,000 households -- less than the wealthiest 0.1% -- but raise around $2.75 trillion over 10 years.
The plans, a Sanders aide told CNN, would not come into conflict, but rather -- along with a concurrent rise in the top income tax rates, like the one Ocasio-Cortez has discussed -- fit together as puzzle pieces in a broader progressive effort to reverse a trend of that has seen American wealth increasingly concentrated among its most affluent households.
Others are taking a different approach. California Democratic Sen. Kamala Harris, who recently declared her presidential candidacy, is emphasizing tax breaks for the middle class, putting more money directly in the pockets of those working families. She would provide a tax credit of up to $6,000 a year for married couples earning up to $100,000 annually, and a credit of up to $3,000 for single filers making up to $50,000 and single parents earning up to $100,000.
Unlike a typical tax credit, though, the bill would also allow taxpayers to receive the benefit -- up to $500 -- on a monthly basis. This would provide families with an alternative to taking out payday loans, which usually come with very high interest rates, according to her proposal.
The total cost, according to the non-partisan Tax Policy Center, would be $3 trillion over 10 years.
Hiking taxes on the rich is typically a popular move among Democrats, but a recent Fox News poll found that voters in both parties generally support raising rates on multimillionaires. Democrats are more enthusiastic, with 85% favoring increasing taxes on those making more than $10 million. Some 54% of Republicans agree.
Sanders' proposal is supported by the progressive University of California Berkeley economics professors Emmanuel Saez and Gabriel Zucman, who also worked with the Warren team to analyze her plan, a source confirmed to CNN. French economist Thomas Piketty, who has previously worked with Saez and Zucman, and is the author of 2014's "Capital in the 21st Century," also backed the Sanders proposal.
"Today's US is becoming even more unequal than Pre-World War I Europe. The way out is stronger investment in skills, higher paying jobs and a more progressive tax system. Sen. Sanders' estate tax bill, including a 77% tax rate on estate values above $1 billion, is an important step in this direction," Piketty said in a press release provided by Sanders' office.