What the Bill Actually Proposes

Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.) have introduced the Make Billionaires Pay Their Fair Share Act, which would impose a 5% annual tax on the total net worth of the approximately 938 billionaires in the United States—a group collectively worth an estimated $8.2 trillion.

Unlike the current tax system, which only taxes income when it is earned or assets when they are sold, this proposal would apply each year to the full value of a billionaire’s holdings—including stocks, real estate, private business interests, and other investments. In other words, even if a billionaire never sells a single share, they would owe taxes on how much their wealth has grown.

The bill’s sponsors point to a stark economic divide as justification. CEOs of large U.S. corporations now earn approximately 350 times more than their average workers, while more than 60% of Americans report living paycheck to paycheck — a reality all too familiar to many retirees managing Medicare costs, prescription drug expenses, and rising grocery bills.