Sanders and Khanna Just Proposed a 5% Wealth Tax on Billionaires. Here's What CPAs Need to Know.

Bernie Sanders and Ro Khanna just introduced a wealth tax bill that would send $3,000 checks to millions of Americans. The catch? It's funded by a 5% annual tax on the country's 938 billionaires.

The "Make Billionaires Pay Their Fair Share Act" landed Tuesday. Here's how it works: every billionaire in America pays a 5% annual wealth tax. That group—all 938 of them—is worth a collective $8.2 trillion. The tax would raise $4.4 trillion.

In year one, every person in a household making $150,000 or less gets a $3,000 direct payment. A family of four? $12,000.

The rest of the $4.4 trillion goes toward reversing $1.1 trillion in Medicaid and Affordable Care Act cuts from Trump's One Big Beautiful Bill Act, expanding Medicare to cover dental, vision, and hearing for seniors, building affordable housing, capping childcare expenses at 7% of household income, and establishing a $60,000 minimum salary for public school teachers.

What Sanders and Khanna Are Saying

"At a time of unprecedented income and wealth inequality, this legislation demands that the billionaire class in America finally pay their fair share of taxes so that we can create an economy that works for all of us, not just the 1%," Sanders said in a statement. "In a democratic society, we cannot tolerate 60% of our people living paycheck to paycheck—struggling to pay for housing, food and health care—while 938 billionaires have become $1.5 trillion richer."

Khanna framed it as bridging the divide between Silicon Valley wealth and families struggling with basics. "We have a deep economic divide in this country. On one side, places like Silicon Valley are generating extreme wealth. On the other side, families are struggling to cover the cost of health care, housing, and basic needs," he said. "We can tax billionaires a modest amount to make sure everyone has a fair chance while keeping our innovative engine."

Why CPAs Need to Pay Attention

This bill isn't likely to pass. It's the same playbook Sanders has run for years—high-profile wealth tax proposals that generate headlines but don't make it through committee. But for CPAs advising ultra-high-net-worth clients, the proposal signals where the conversation is headed.

Wealth taxes are notoriously complex to administer. The IRS would need to value assets annually—including illiquid holdings like private companies, real estate, and art. That creates massive compliance burdens for taxpayers and enforcement challenges for the IRS. Europe tried wealth taxes and most countries abandoned them because they were unworkable.

But the fact that Sanders and Khanna are reintroducing this now—during tax season, when inequality is front-page news—means wealth tax proposals will keep coming. CPAs with billionaire clients should be modeling out what 5% annual wealth erosion looks like over a decade. That's not tax planning—that's estate decimation if it ever passes.

For CPAs with Main Street clients, the $3,000 direct payment is the headline. If your clients are asking about it, the answer is: don't count on it. This bill has near-zero chance of becoming law in the current Congress. But it's a useful data point for understanding where progressive tax policy is headed.

What This Means

The bill is dead on arrival politically, but it's alive as a messaging tool. Sanders and Khanna are setting the frame for 2028 tax debates. For CPAs, that means wealth tax scenarios should be part of strategic planning conversations with ultra-high-net-worth clients—not because this bill will pass, but because the next one might look similar.

And if your clients ask whether they'll get $3,000 checks? Tell them to file their taxes first.