The millionaires surtax was originally introduced in 2019 and reintroduced in 2021 by Maryland Senator Chris Van Hollen (S 2028) and Virginia Representative Don Beyer (HR 3805). It would institute a 10 percent surtax on the incomes of couples making $2 million or more (top 0.2 percent). The Tax Policy Center estimated it would raise $635 billion over 10 years.
The idea saw further exposure when Presidential candidate Michael Bloomberg proposed a 5 percent surtax on incomes over $5 million.
The Americans for Tax Fairness coalition has coordinated a national campaign that has now put the concept at the center of the federal budget negotiations.
The recently released House Ways and Means plan differs slightly from our original proposal. It would impose a 3 percent surtax on the incomes of ultra-wealthy households making $5 million or more per year, raising an estimated $127 billion over 10 years. It applies to incomes from investments, including trusts. (See section 138206 “Surcharge on High Income Individuals, Trusts and Estates,” on page 652).
Of course, the Holy Grail tax reform would be a total elimination of the preferential treatment of capital gains, taxing income from wealth at the same rates as income from wages. Short of that, a surtax on the incomes of ultra-millionaires is an important foot in the door toward equalizing the treatment of capital and wage income.