Bernie Sanders Proposes Tax on the US Wealthy

U.S. Presidential hopeful Senator Bernie Sanders introduced Thursday a legislation that would impose higher estate taxes on the rich.

The Sanders bill would lower the tax exemption amount from US$5 million to $3.5 million on an individual’s estate.

The legal measure would also eliminate tax breaks for dynasty trusts and billionaire surtax.

However, under the proposed bill just 3 out of every 1,000 people who die would be subject to estate tax, compared to 2 out of 1,000 now.

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The move comes as Republican lawmakers in both the House and the Senate are hoping to repeal the current estate tax laws, which would allow nine families to dodge over US$25.7 billion in taxes, according to a new report by Public Citizen released on Thursday.

“We today have massive and grotesque levels of income and wealth inequality. We have got to address that issue. And one of the fairest and most straightforward ways of doing it is through a progressive estate tax,” Bernie Sanders told Bloomberg News.

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The gap between the nation's wealthiest and the rest of the country’s population has increased in recent years, according to a 2014 study by the Federal Reserve.

“Data from the 2013 SCF (Survey of Consumer Finances) confirm that the shares of income and wealth held by affluent families are at modern historically high levels.” The Federal Reserved reported.

The report found that since the end of the economic recession that the top 3 percent of income earners control 54.4 percent of all wealth up from 51.8 percent in 2007, compared to the bottom 90 percent, which controlled just 24.7 percent of wealth in 2013, down from 33.2 percent in 1989.

A majority of U.S. citizens belonging to both political parties view economic inequality as a ‘big problem’ including the majorities of Democrats (89 percent), independents (77 percent) and Republicans (60 percent), according to a 2014 Pew Research poll.

Economic inequality has risen up the global political agenda in recent years with the Thomas Piketty book focusing on how the wealth is increasingly concentrated on the top 1 percent becoming a bestseller. In Latin America, Ecuadorean President Rafael Correa is seeking to raise taxes on the wealthiest 2 percent.