Democratic leaders propose a 5% wealth tax on billionaires across the United States, with a ten-year total of $4.4 trillion.

Senator Bernie Sanders has proposed a 5% annual wealth tax on approximately 1,000 billionaires across the United States, which is expected to raise $4.4 trillion over ten years. This proposal has already sparked significant division within the Democratic Party, coinciding with California’s similar plan that has led to a mass exodus of tech billionaires.

According to media reports, the related bill will be introduced in the House by Democratic Representative Ro Khanna of California, who served as co-chair of Sanders’ 2020 campaign and is a public supporter of the California billionaire tax plan. Sanders stated in a release that the revenue from the proposal will “substantially improve the lives of the American people and address the major crises faced by working families.”

Under the proposal, funds will be used to provide a $3,000 cash subsidy to Americans earning less than $150,000 annually, raise the minimum salary for public school teachers to $60,000 per year, and expand Medicare coverage to include dental, vision, and hearing services, along with other government expansion programs.

When the proposal was announced, California’s ongoing billionaire tax plan had already caused a stir in Silicon Valley. Meta founder and CEO Mark Zuckerberg, Google co-founders Larry Page and Sergey Brin have all moved to Florida, and some Democrats have publicly opposed similar wealth tax ideas.

Bill Framework: 5% Annual Tax Rate on About 1,000 U.S. Billionaires

According to The Washington Post, the bill would impose a 5% annual tax on the wealth of about 1,000 billionaires nationwide, potentially raising $4.4 trillion over ten years. This plan continues Sanders’ policy platform from his 2020 presidential run—at that time, he proposed a progressive tax on wealth exceeding approximately $32 million (jointly filed for couples), starting at 1%, with rates rising to 8% on amounts over $10 billion. It was projected to raise about $43.5 billion over ten years to fund “Medicare for All,” housing, and childcare programs. Sanders described billionaires as “oligarchs, kings, and czars of the 18th century,” stating they “no longer see themselves as part of American society.”

The proposal includes a list of expenditures aligned with progressive policy goals, such as providing a $3,000 cash subsidy to Americans earning less than $150,000 annually, raising the minimum salary for public school teachers nationwide to $60,000, and expanding Medicare to cover dental, vision, and hearing services. Representative Ro Khanna, who is also a supporter of California’s billionaire tax plan, further emphasizes the progressive political stance of the proposal.

California Precedent: Wealth Tax Controversy Sparks Wealthy Exodus

As Sanders’ nationwide proposal is introduced, California is considering a billionaire tax plan that taxes unrealized gains. The plan has attracted widespread attention in Silicon Valley: Zuckerberg has spent $150 million on property in Miami and has moved with Larry Page and Sergey Brin to Florida, where the business environment is more relaxed.

Notably, Reid Hoffman, co-founder of LinkedIn and a major Democratic donor, has publicly criticized California’s billionaire tax as “a terrible idea,” arguing it will accelerate the departure of tech founders and executives. California Governor Gavin Newsom, widely seen as a potential 2028 presidential candidate, has also publicly opposed the plan, stating last month that it “will be vetoed” and that the state will “take all necessary measures to protect California.” This intra-party rift adds political obstacles to Sanders’ efforts to push similar policies nationwide.