WASHINGTON, D.C. – Today, Congressman Jamaal Bowman, Ed.D. (NY-16) introduced legislation titled the “Babies Over Billionaires Act” which would tax the unrealized capital gains of the top 0.01% of taxpayers with over $100 million in assets.
“Since the pandemic began, everyday people have borne the brunt of negative public health and economic outcomes. COVID-19 has taken nearly one million lives in the United States alone, forced people to decide between paying rent or buying food, and otherwise upended the livelihoods of millions, especially our youth,” said Congressman Jamaal Bowman, Ed.D. (NY-16). “Meanwhile, American billionaires have shamelessly increased their collective wealth by more than $2 trillion. As a society it’s time we center the people’s needs who account for most of the American population, instead of roughly 700 billionaires who have swindled us all.”
“Policy reflects our priorities, and for decades, the United States has chosen to invest in the personal wealth of billionaires while failing to invest in the tangible needs of our children and our communities. Working class people are taxed more than billionaires at times and often have their income more harshly scrutinized, all while struggling to keep up with the rising costs of basic needs like food and housing. At the same time, the tax code privileges billionaires who hide their wealth in an effort to avoid paying their fair share in taxes. The IRS also lacks the resources and capacity needed to audit and tax the ultra wealthy, while consistently auditing and taxing working families more. This bill would direct more resources towards the IRS to audit and tax people whose income requires more than reviewing just a W-2 or 1099 form, people like billionaires. By auditing and taxing the 700 richest people in our country the wealthy will finally pay their fair share. As a result more taxpayers funds would be made available for children-centered programs in the U.S. Department of Education and the U.S. Department of Health and Human Services. We must invest in our youth’s future and critical social safety nets - the wealthy are more than capable of funding that effort!”
“Billionaires should pay their fair share of taxes – just like everyday workers, just like a grocery clerk, a teacher, a police officer, or a nurse,” said Congressman Danny K. Davis (Il-7). “Equitable taxation is a critical step to providing much-needed federal investment to strengthen children and families.”
“Billionaires and working families have had extremely different experiences in the last two years,” said Congresswoman Susan Wild (PA-7). “This bill will address the inequities in our tax code that keep the ultra-wealthy from paying their fair share and will invest the revenue raised in those who deserve it most: our children and hardworking families.”
“America has a two-tier tax system: one system for the millionaires and billionaires, and one system for everyone else. That unfair system is a primary driver of the economic divisions slowly tearing America apart,” said Congressman Bill Pascrell (NJ-9), a senior member of the tax-writing House Ways and Means Committee and lead sponsor of legislation to close the infamous stepped-up basis and carried interest loopholes. “This legislation is another sharp tool to rebalance our unfair two-tier tax system and finally begin making those at the top pay their rightful share. Measures like this are essential to rebuilding public confidence in our nation. I thank Rep. Bowman for his aggressive work to make our tax system fair again.”
It’s time the tax code works for working families and not just wealthy people. The Babies Over Billionaires Act proposes income tax reform for the ultra-wealthy that would disproportionately impact the roughly 700 billionaires in the country to raise more than $1 trillion over ten years.
Specifically, the Babies Over Billionaires Act will:
Annually tax 30% of unrealized gains of ultra-millionaires from publicly traded capital assets at the prevailing long-term capital gains rate;
Tax 50% of unrealized gains of private capital assets at the prevailing long-term capital gains rate every 5 years;
Mandate the IRS annually audit filers reporting in excess of $100 million in assets to crack down on rampant tax abuse by the wealthy.
Invest the revenue raised by this tax in programs run by the Department of Education and HHS that support families and children.
Co-leads of the legislation include Representatives Bill Pascrell, Danny K. Davis, and Susan Wild.
Co-sponsors of the legislation include Representatives Eleanor Holmes Norton and Bonnie Watson Coleman.
Sponsoring organizations and people include: the American Federation of Teachers, Patriotic Millionaires, Economic Security Project Action, National Latino Farmers & Ranchers Trade Association, Progressive Change Campaign Committee, National Black Justice Coalition, Americans for Democratic Action (ADA), Coalition on Human Needs, MomsRising, Missionary Oblates of Mary Immaculate JPIC, People's Action, Jobs with Justice, RootsAction.org, Family Values @ Work Action, Public Citizen, National Asso. for Hispanic Elderly, Main Street Alliance, NETWORK Lobby for Catholic Social Justice, Family Values@Work, Institute on Taxation and Economic Policy, RESULTS, Oxfam America, National Coalition for the Homeless, Indivisible, MoveOn and American Federation of State, County & Municipal Employee, The Children's Defense Fund, Americans for Tax Fairness, United Auto Workers and The American Federation of Labor and Congress of Industrial Organizations
Click herefor a one-page summary of the Babies Over Billionaires Act.
Click here for a section-by-section of the Babies Over Billionaires Act.
Click here for full bill text of the Babies over Billionaires Act.
“The existing income tax is badly broken as applied to most billionaires and mega-millionaires, who are typically able to escape all tax on the majority of their true income or the returns to their invested wealth. This bill would fix the income tax by ending the ways in which billionaires and mega-millionaires currently escape tax. The bill uses an innovative phased mark-to-market methodology to spread out the taxation of investment gains over time so as to minimize valuation problems and volatility,” said David Gamage, Law Professor at Indiana University.
“Basic fairness and sound tax policy more broadly indicate that we need to do better at taxing the income of the extremely wealthy. This bill introduces two important innovations. First, the bill only taxes a portion of the capital gains of billionaires, which helps deal with fluctuations in asset value. Second, the bill taxes privately held assets, but less regularly than public assets. This will prevent gamesmanship between asset categories while also not imposing too great an administrative burden,” said Darien Shanske, Law Professor at UC Davis.
"This legislation makes a simple yet profound statement: our tax system must start benefiting babies and their working parents, and stop coddling billionaires and their yachts. This bill will close one of the worst tax loopholes so that billionaires and other ultrarich people will be taxed annually on their investment gains—just like workers are taxed every year on their wages. Rep. Bowman’s bill makes the tax system fairer while raising lots of needed revenue from the ones best able to supply it,” said Frank Clemente, Executive Director, Americans for Tax Fairness.
"For too long, our tax system has made it possible for the super rich to extract wealth from white, Black and Brown working people, while not paying their fair share for the services we all use. This has created exploding white billionaire wealth and struggling Black and Brown working families. It's time we start using the tax code to build wealth for working people,” said Mandla Deskins, Take on Wall Street at Americans for Financial Reform.
“Too many American families are struggling—living paycheck to paycheck or not making ends meet, particularly with rising costs, while doing their best to keep their loved ones healthy and helping their kids stay safe and engaged at school. The past two years have challenged us in so many ways, and the American family has stepped up each time. Yet at the same time, American billionaires are making a killing during COVID-19, managing to accumulate more than $1.7 trillion in new wealth during the pandemic and, in some cases, paying as little as nothing in federal taxes.
No one should be profiting off a pandemic while shirking their responsibilities to pay their fair share, especially at the expense of our youth. Rep. Jamaal Bowman’s Babies Over Billionaires Act is just a commonsense rebalancing of the tax code by rewarding work instead of extreme wealth and prioritizing investments that benefit our nation's future generations,” said Randi Weingarten, President of the American Federation of Teachers.
"While the country suffered during the COVID crisis, the wealth of the billionaire class surged by $2 trillion, and these wealth gains have gone largely untaxed. [Rep.] Bowman's bill addresses head-on this tax injustice by making sure billionaires pay their fair share and pay it timely. The proposed tax will raise more than $1T over the next 10 years solely from billionaires, making it possible to keep funding the expansion of the child tax credit that cut child poverty in half in 2021,” said Emmanuel Saez, Economics Professor at UC Berkeley.
“While ordinary workers have to pay taxes year after year, billionaires can defer taxation for decades and sometimes forever. Congressman Bowman’s bill is a common-sense solution to this unjustifiable situation,” said Gabriel Zucman, Economics Professor at UC Berkeley.
"Our current tax code is ill-equipped to handle the realities of modern wealth. As a result, billionaire wealth in America has skyrocketed while many pay virtually no taxes. Their ability to choose when to pay taxes on their capital gains gives them an enormous advantage over people who pay taxes on every paycheck. It's time to require the richest people in this country to pay taxes every year just like Americans who work for a living. The Babies over Billionaires Act is exactly what this country needs - it would fix one of the fundamental injustices of our tax code and raise hundreds of billions of dollars while costing 99.9% of Americans nothing,” said Morris Pearl, the Chair of the Patriotic Millionaires and a former managing director at BlackRock, Inc.
"Rep. Bowman's bill tackles the single biggest inequity in the tax code - the fact that billionaires often pay no tax at all as they accumulate their enormous wealth, while working people have taxes taken out of every paycheck. With President Biden's billionaire minimum tax proposal and this important new legislation, there is growing momentum to fix our broken tax code and plans on the table that are both bold and practical. Rep. Bowman and colleagues should be commended for confronting inequality head on and prioritizing children and families,” said Seth Hanlon, Senior Fellow for Tax and Budget Policy at Center for American Progress.