Sen. Bernie Sanders and Rep. Ro Khanna have introduced legislation that would impose a 5% annual federal wealth tax on Americans with net worth of at least $1 billion, setting up a fresh debate over inequality, government revenue and the practical challenges of taxing large fortunes.
The proposal, called the Make Billionaires Pay Their Fair Share Act, was announced on March 2, 2026. Sanders’ office said the measure would apply to approximately 938 U.S. billionaires whose combined wealth was estimated at $8.2 trillion when the bill was introduced.
The legislation is a proposal, not current law. It would need to pass Congress and be signed by the president before taking effect.
How the proposed wealth tax would work
The measure would impose a 5% annual tax on the net wealth of taxpayers who meet the $1 billion threshold, which would be adjusted for inflation. Unlike an income tax, the charge would be based on the estimated value of assets minus liabilities.
That distinction matters. The proposal is not described as a 5% tax only on the portion of a fortune above $1 billion. Examples released by Sanders’ office calculate the tax against a billionaire’s broader net wealth once the threshold is met.
The bill also proposes new reporting and enforcement rules, including an ownership registry covering assets such as investment accounts, real estate and privately held businesses. One percent of the revenue raised would be directed toward enforcement.
What supporters want to fund
Sanders and Khanna say revenue from the tax would be used for a package of direct payments and social programs. The proposal includes:
- A first-year payment of $3,000 for each person in households earning $150,000 or less
- Expanded Medicare coverage for dental, vision and hearing services
- Medicaid and home-care support for seniors and people with disabilities
- Construction, rehabilitation and preservation of affordable housing
- A cap limiting childcare costs to 7% of household income
- A $60,000 minimum annual salary for public-school teachers
Supporters argue that the policy would reduce extreme wealth concentration while directing money toward households facing high housing, healthcare and childcare costs.
Why the $4.4 trillion estimate is disputed
Economists Emmanuel Saez and Gabriel Zucman estimated that the proposal could raise about $4.4 trillion over 10 years. Their model assumes that billionaire wealth grows roughly with the broader economy and that the bill’s enforcement rules keep avoidance and evasion relatively limited.
That figure is an economic projection, not guaranteed federal revenue.
The Tax Foundation, which is critical of wealth taxes, argues that collections could be substantially lower because taxpayers may change how they hold, value or report assets. It estimates that a higher avoidance assumption could reduce 10-year revenue to roughly $3.3 trillion. A separate estimate cited by the organization places potential revenue near $2.3 trillion after accounting for additional behavioral responses and existing tax avoidance.
Valuing publicly traded stock is relatively straightforward, but privately held businesses, real estate, artwork and other illiquid assets can be difficult to price every year. Critics also argue that a high annual tax could reduce domestic saving and investment, encourage avoidance or face constitutional challenges.
Supporters respond that stronger reporting rules, trust provisions and enforcement funding are designed to limit those problems. The disagreement shows why the final revenue would depend heavily on enforcement, court decisions, asset values and the behavior of affected taxpayers.
A political argument, not a neutral description
Some social-media posts describe the proposal as a way to “fix Trump’s mess.” That phrase represents a political opinion rather than the formal title or an objective description of the legislation. Hourly Times is presenting the proposal using its official provisions and clearly separating supporters’ claims from critics’ estimates.
Reader poll
Do you support a 5% annual wealth tax on U.S. billionaires?
- Support: Billionaires should pay substantially more to fund public programs.
- Oppose: A wealth tax would create legal, valuation and economic problems.
- Different approach: Raise billionaire taxes through other changes to the tax code.
Share your view: Would a federal wealth tax make the tax system fairer, or create more problems than it solves?