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Mike Bloomberg Proposes New Taxes on High Income Earners and Businesses to Pay for Critical Priorities

February 1, 2020

Proposes tax reforms generating $5 trillion in revenue, to pay for public investments like health care, infrastructure, education, climate resilience, and affordable housing.

Will reverse Trump rules that mainly benefit wealthy, allow corporations to avoid paying taxes, and undermine economic security of the middle class.

NEW YORK — Democratic president candidate Mike Bloomberg proposed tax reforms targeting the wealthiest people and corporations in the country, to pay for critical priorities like health care, infrastructure, education, climate resilience, and affordable housing. Mike believes that the current tax system is deeply unfair because it taxes income from capital at a much lower rate than income from work, allows accumulated wealth to pass from generation to generation with little or no tax due, and provides countless loopholes that the rich can exploit to reduce their taxes still further. To improve the nation’s tax system and make it fairer for everyone, Mike proposed raising rates on high-income taxpayers, taxing capital income more equitably, closing loopholes, and bolstering enforcement.

“Tackling income inequality requires major new investments in education, job training, health care, affordable housing, infrastructure and other areas this president is ignoring or making worse. Those investments require new revenue – and a fairer, more progressive tax system that asks wealthy Americans like me to pay more,” said Mike Bloomberg. “The plan I am releasing today raises rates on wealthy individuals and corporations, closes loopholes, cracks down on tax avoidance, expands the estate tax, and reduces the tax advantages that investors have over workers. And, most importantly, my plan is achievable.”

Mike’s Tax Plan will:

  • Raise rates for high-income taxpayers. Mike will dedicate his administration to turning this dangerous trend around by reversing the Trump tax changes for high-income households, restoring the top rate on ordinary income from 37% to 39.6%.
  • Tax capital income more equitably. Mike will ensure that wealthy owners of capital are taxed on equal terms with workers. He will tax capital gains at the same rate as ordinary income for taxpayers above $1 million. Taxes won’t rise on the savings of ordinary taxpayers, and Mike will impose strong new measures to curb avoidance and deferral for the wealthiest Americans.
  • Impose a new tax on the very rich. Mike will ask the wealthiest to make an additional contribution toward paying for necessary improvements in infrastructure, education, health care and more. He will put in place a 5% surtax on incomes above $5 million a year and apply it to income from capital and labor.
  • Reform the estate tax. Mike will lower the estate-tax threshold, so that more estates are taxed. This plan will protect family owned farms and small businesses. Estates liable to pay tax will still be less than 1% of the total. In addition, Mike will end stepped-up basis for unrealized capital gains at death and shut down multiple estate-tax avoidance schemes.
  • Close loopholes. Mike will work for a thorough simplification of the system, so that tax preferences serving no good purpose are purged. For example, he will: Close the “pass-through” 20% deduction that lets many rich taxpayers pay less; End the “like-kind” provision that lets real-estate investors defer tax indefinitely; End the carried-interest loophole; and Move firmly to shut down other tax-avoidance strategies.
  • Make businesses pay their fair share. Mike will raise the corporate tax rate from 21% to 28%, raise the minimum tax on foreign income and apply it on a per-country not global basis, and tighten rules on transfer pricing and reporting of foreign taxes. He will also apply pressure to countries that set up as tax havens and take the lead on cooperative international efforts to defeat profit-shifting.
  • Equip the IRS. Mike will reverse Trump’s efforts to cripple the agency and give it the resources it needs to do its job, and collect many hundreds of billions in taxes owed but never paid.

While he was mayor, New York City had one of the most progressive tax structures in the nation, with low and middle-income taxpayers holding very little or no tax liability and the wealthy paying the bills. Nearly half of all income tax filers had no income tax liability or negative liability (meaning they received money back), while the top one percent of earners paid nearly 50% percent of the City’s personal income tax haul, and the top third of filers paid 94 percent. All told, Mike Bloomberg increased taxes on the wealthy by more than $16 billion.

President Trump signed the Tax Cuts and Jobs Act into law in December 2017, providing big, profitable corporations and the wealthiest Americans with massive tax breaks that undermined the economic security of middle class Americans.

For more information on Mike’s plan, download this fact sheet.

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