Democratic lawmakers are eying an “ultra-millionaire tax” that would crack down on the wealth of America’s millionaires every year. 

Senator Warren, Congresswoman Pramila Jayapal, and Congressman Brendan Boyle are proposing legislation that would require American households to pay 2 percent annually on every dollar of wealth that exceeds $50 million. Net worths exceeding 1 billion would be subject to a 3 percent tax overall. 

This latest version of the bill takes aim at trusts, which the lawmakers see as a way for the wealthy to avoid paying between $5 billion and $7 billion taxes annually. Ms. Jayapal said in a statement that “the system is not working” when the richest one percent of Americans own more than 30 percent of our nation’s wealth but pay 3.2 percent of their wealth in taxes while others pay twice as much.

Look no further than the fight over President Biden’s spending wish list for a sign of how this legislation may spark fierce debate in Congress. Though his 2024 budget is still under negotiation at Capitol Hill midway through the fiscal year, Mr. Biden has proposed tax hikes for billionaires and corporations to balance a spending budget of $7.3 trillion for 2025. 

“I’m going to keep fighting like hell to make it fair!” Mr. Biden said when he announced the plan during his State of the Union address earlier this month. He seeks to raise taxes on billion-dollar companies to 21 percent from 15 percent and hike the broader corporate tax rate to 28 percent, as well as impose a minimum 25 percent tax rate on the unrealized income of the wealthiest households. 

Tax policy is emerging as a crucial difference between the Democratic and Republican parties as the presidential election draws near. Republicans generally seek to extend all expiring tax cuts from the 2017 law President Donald Trump signed, to the tune of $4 trillion. 

Mr. Biden, meanwhile, says he wants to raise taxes to generate more than $2 trillion beyond current forecasts. This is part of his plan to help fund tax cuts and expand social services for the working and middle class while cutting the US budget deficit by $3 trillion over the next decade. 

“This legislation will fight back,” Mr. Boyle said in a statement about his proposed tax hike, “against Republicans’ decades-long scheme to rig our tax code against middle class families and in favor of multi-millionaires and billionaires.”