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John,
Last year, the U.S. House passed a millionaires surcharge as part of the Build Back Better Act, which would place an additional 5% tax on incomes over $10 million and 8% on incomes over $25 million. Now the Senate is gearing up to take action on a smaller version of this economic package that would raise about $1 trillion in new taxes, and the millionaires surcharge is in danger of being severely weakened or removed.
The millionaires surcharge would impact only the richest 0.02% of taxpayers while raising $228 billion over 10 years that could be used to lower costs for working families on vital household expenses.[1][2] It is also the most significant reform for taxing the ultra wealthy passed by either chamber in years.
Write to your U.S. senators and tell them to preserve the millionaires surcharge, which is the only tax increase in the House-passed bill that would specifically tax the ultra rich. If anything, the Senate should strengthen the millionaires surcharge by lowering the threshold over which the tax is due, as proposed by Senator Chris Van Hollen (MD) and Rep. Don Beyer (VA) in their Millionaires Surtax—legislation that Americans for Tax Fairness spearheaded.[3]
Revenue raised from taxing incomes of $10 million and more could reduce homecare costs paid by families for elderly and disabled family members ($209 billion); or guarantee paid family and medical leave for all workers ($205 billion). It could offer free preschool for all 3- and 4-year olds ($214 billion); or lower rent and mortgage costs by increasing public and private housing supplies ($151 billion).[4]
Efforts to water down the millionaires surcharge focus on three types of income that overwhelmingly flows to the wealthiest wage earners.[5]
The first would exempt so-called “pass-through” businesses. Over half of all pass-through income goes to the top 1% of taxpayers.[6]
The second would maintain the “carried interest” loophole, which allows wealthy money managers to mislabel their compensation as investment income, which is charged a much lower tax rate, despite consensus across the political spectrum to close it.[7][8]
The third would exempt capital gains―profit from selling an asset for more than its purchase price, which currently enjoys a top tax rate of just 20%, compared to 37% on the same amount of income from wages.[9]
Click here to write to your U.S. senators right now and tell them to preserve, and not water down, the millionaires surcharge, which is the only tax increase passed by the House as part of President Biden’s economic plan that specifically targets the income of the ultra rich.
While there are other ways we should be taxing the ultra rich, such as a Billionaires Income Tax, which taxes the wealth gains of billionaires each year, not just when they sell stocks and other investments―a millionaires surcharge on incomes of $10 million or more is a big first step.
Thank you for taking action today to demand the Senate preserve, and not water down, the millionaires surcharge.
Sarah Christopherson
Legislative and Policy Director
Americans for Tax Fairness Action Fund
[1] “President Biden Announces the Build Back Better Framework, The White House Press Statement,” Oct. 28, 2021
[2] “Democrats’ Bill Comes With $1.5 Trillion In New Taxes—Here’s How It Breaks Down And Who Would Be Most Affected,” Forbes, Nov. 4, 2021
[3] ATF Millionaires Surtax Website, http://surtax.org/
[4] “What the Billionaires Income Tax Can Pay For,” Americans for Tax Fairness
[5] “Manchin told White House he would support version of tax on billionaires,” The Washington Post, Dec. 24, 2021
[6] “Senate’s ‘Pass-Through’ Tax Cut Favors Biggest Businesses and Wealthiest Owners,” Center on Budget and Policy Priorities, Nov. 14, 2017
[7] “Ending the Carried Interest Loophole Act,” Overview, 2019
[8] “Hillary Clinton and Donald Trump agree on one thing: Hedge fund managers should pay more taxes,” Quartz, Oct. 10, 2016
[9] “Biden would tax wealth like work by reforming capital gains taxes,” Americans for Tax Fairness, Apr. 18, 2021
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