Bernie Sanders explains his proposed billionaire tax

Vermont Sen. Bernie Sanders (I-VT) is no stranger to singling out the richest of the rich. Along with Rep. Ro Khanna (D-CA), Sanders recently introduced the Make Billionaires Pay Their Fair Share Act, a 5 percent annual wealth tax on anyone in the US worth over a billion dollars. 

The act would affect 930 people — the very tippy-top of the 0.01 percent. Elon Musk would owe roughly $42 billion per year. Mark Zuckerberg would owe $11 billion. 

And what would this new wealth tax fund? 

In its first year, according to the Sanders proposal, it would provide $3,000 direct payments to every American in a household earning $150,000 or less, with subsequent revenue used to address “the most pressing crises facing working families.”

While the bill has essentially no chance of passing Congress in the near future, it could become a litmus test for Democratic presidential candidates in 2028. Vox’s Astead Herndon sat down with Sanders for Today, Explained to ask him about how the tax would actually work, as well as about some of the other most pressing issues of the moment: how Democrats should navigate the AI landscape, Sanders’s call for a moratorium on building new AI data centers, and President Donald Trump’s recent strikes in Iran. 

Below is an excerpt of their conversation, edited for length and clarity. There’s much more in the full podcast, so listen to Today, Explained wherever you get podcasts, including Apple Podcasts, Pandora, and Spotify.

You can also watch the Saturday interviews this week and every week on the Vox YouTube channel. Subscribe at youtube.com/vox.

Most Democrats have condemned the US-Israel strikes in Iran, but Donald Trump is blowing ahead. Is there any recourse coming from Congress? 

What we have got to do is pull the financial plug here. I think what we have got to do our best in saying is that not only is this war unconstitutional, not only is it illegal, [but] when we have so many strong domestic needs in terms of housing and health care and education, we’re going to be just throwing tens of billions of dollars into another endless war. 

I think taking a look at how we finance wars is one of the areas that we have to move to. But the bottom line is we’ve gotta do everything that we can to stop Trump’s reckless foreign policy, which is not only unconstitutional, not having gone to Congress, [but] it is in violation of international law and will lead, in my view, to international anarchy. 

You and Congressman Khanna introduced this bill that would add a 5 percent annual tax on wealth for anyone making over a billion dollars. And importantly, this is a wealth tax, not an income tax. Things like assets and stock accumulation are also in play. Why $1 billion? 

We wanted to make very clear that today we have more income and wealth inequality than we’ve ever had in the history of the United States of America. We all read about the Gilded Age, right? Nickels and dimes compared to where we are right now. 

We’re living in a moment where the top 1 percent owns more wealth than the bottom 93 percent, where one man, Elon Musk, owns more wealth than the bottom 53 percent of American households, where, while 60 percent of our people are living paycheck to paycheck, the billionaire class has seen its wealth increase by a trillion and a half dollars since Trump was elected. 

The point is that at a time of so much inequality, we have to ask the wealthiest people to start paying their fair share of taxes. One way to do it is a wealth tax. I personally think starting off at a billion dollars is the appropriate way to go. 

The goal of the revenue is to send $3,000 checks to every American in a household making $150,000 or less. Should I see this as a means of funding a kind of universal basic income? 

No. It does two things: It says that at a time when the very richest people are becoming much, much richer, while ordinary Americans today are struggling to put food on the table or pay for childcare or pay for health care, the working class of this country needs immediate help. 

On top of that, we make massive investments every year in child care, in housing, in education, in health care, in addressing the basic needs of working class Americans. And yet everything being equal, our kids will have a lowest standard of living than we will, and millions of families are struggling. 

All of our people should have a decent standard of living, and we have to address the massive level of income and wealth inequality to do that. 

France tried a wealth tax and repealed it. Sweden tried one, repealed it, and the European countries that have gone back have almost universally said that it was because capital left, or evasion meant that they did not see the necessary revenue returns. Why would that not be true in the United States? 

I think we need to enact that legislation, and then we need a political movement to make sure that it is implemented.

That’s a pretty high standard.

One of the things that is really troubling to me is what you are saying is, Look, even if the American people want it, these guys will evade it one way or another. Is that what you’re saying? 

Other countries have repealed the wealth tax because of that exact problem. 

We have to deal with it. 

I was out in California a few weeks ago where they’re dealing with a state wealth tax. The issue there is that 15 million people, including many in California and Vermont, have been thrown off the health care they have in order to give a trillion dollars in tax breaks to the 1 percent. 

What the 1 percent are saying is, You want us to pay more in taxes so that working class people and children will have health care? If you pass that, you know what we’re going to do. We’re going to move to Texas, we’re going to move to Florida. 

The time is long overdue that we stand up to that greed and say, no, that’s not the choice. You are in America, you benefited from America, you’re part of America. You don’t have the divine right to rule and you play by the rules, and if we pass this tax, you’re going to pay it.

You called for a moratorium on AI data center construction. I spoke with your ally Ro Khanna about this, and he disagreed about that point. Why do you think the time is now to put a moratorium on data centers?

I don’t think a moratorium is the solution to all the problems. I think it’s the right thing to do now, and here’s why. What I have been really stunned by is that I go out around the country and I talk to people and I say, well, what do you think about AI and robotics? Are you concerned about it? 

I talk to mostly working-class audiences and they say, Bernie, we are really, really concerned. I come back to the United States Senate, and you know what? Hardly anything is being done about it. No legislation has yet been passed, so the disconnect is five miles wide. 

Who’s pushing AI and robotics? The richest people in the world. Elon Musk. Zuckerberg, Bezos, Ellison, Altman, Bill Gates.

The very first question that we have to ask ourselves is, do you think these guys who are investing huge amounts of money in AI and robotics, transforming our economy? Are they staying up nights worrying about you and your family?

They want even more wealth and they want even more power. And at a time when these guys already have so much wealth and power, when they’re buying elections, I worry about that and what it means for our democracy. 

Issue number two, people disagree because nobody really knows what the impact of AI and robotics will mean to our economy.

Some people say, look, you had the Industrial Revolution. People were farmers, they work in factories. No big deal. 

I don’t agree with that. I think what you’re looking at now is going to move a lot more pervasively and a lot faster than other economic transformations.

Looking ahead to the next Democratic presidential nominee, I imagine your top priority may be Medicare for All, but are there two other policies that you want that next nominee to support?

First of all, we have to figure out how we remain a democracy. And it’s not just Donald Trump, who is an authoritarian and is undermining democracy. It is money in politics. 

You talked about AI, right? You know why there’s no regulation of AI right now? It is because the AI industry is prepared and is spending hundreds and hundreds of millions of dollars. If you want to run for Congress, and you want to stand up and say, I have real concerns about AI, they will pour millions of dollars against you. 

You have to deal with Citizens United in creating a democratic society. You need, in my view, public funding of elections. So maintenance of democracy is important, dealing with Trump’s authoritarianism is enormously important, and you have to deal with this issue of oligarchy.

In terms of the needs of the American people, why are we the only major country not to guarantee health care to all people as a human right? That takes you to Medicare for All. You have to deal with AI and its impact.

This is a very difficult and unprecedented moment in American history, and I think elected officials in many ways are far behind where the American people are in terms of their wanting action to protect them, and not just the 1 percent.