Amazon, the massive online retailer, announced on 27 October that it had exceeded its goal of $20 billion in total exports from India over the past ten years and is now aiming for $80 billion in outflows by 2030. Since its introduction in 2015, Amazon has registered over 200,000 exporters who sell over 750 million domestic products under its Global Selling programme.
Over the past year, the company’s overall seller base has increased by more than 33%. Amazon’s 2020 intention to facilitate $10 billion in e-commerce exports by 2025 was then changed to $20 billion in the same time frame.
Amazon Enjoying Fruitful Ride in India
The company claims that categories such as health and personal care (45%), beauty (45%), toys (44%), home (39%), clothing (37%), and furniture (36%) have the strongest 10-year (2015–2025) compound annual growth rate (CAGR). The momentum, according to Srinidhi Kalvapudi, head of Amazon Global Selling India, is a reflection of Indian companies’ aspirations and the expanding significance of e-com exports in international trade.
Building on this success, Amazon is committed to making international selling easier through technological innovation, capacity building, and ecosystem partnerships as it strives to reach its $80 billion cumulative e-commerce export target by 2030. It is still dedicated to supporting India’s e-commerce export expansion in keeping with the government’s objective of achieving $200–$300 billion by 2030.
US and EU Top Markets for Amazon
The two largest international markets for Amazon under the programme are the US and the EU. Germany, Canada, the United Arab Emirates, France, Italy, Spain, and Saudi Arabia are a few additional markets, though.
When asked how the company’s exports are affected by changes in international trade rules, such as the elimination of the “de minimis” system, Kalvapudi responded that it’s a long-term story of structural strengths and creating skills that can compound over time. Because it is a structural tale rather than a seasonal one, Amazon continues to concentrate on these controllable inputs. Building the appropriate capacities is also important, and we have already surpassed the targets. Prior to the ‘de minimis’ exemption, packages under $800 could enter the US duty-free and with no scrutiny.
Quick Shots
•Amazon surpasses its $20 billion e-commerce export target from
India.
•Sets a new goal to reach $80 billion in exports by 2030.
•Achieved through the Amazon Global Selling program launched in
2015.
•Over 200,000 Indian exporters registered under the program.
•Sellers offer 750+ million ‘Made in India’ products globally.
NASA’s Jet Propulsion Laboratory (JPL) announced on 12 October that it will reorganise its personnel by laying off around 550 workers, or 10% of its total workforce, in an effort to maintain the facility’s long-term competitiveness. JPL director Dave Gallagher emphasised in a statement that the changes were a part of a larger strategy to restructure the facility and had nothing to do with the present US government shutdown.
Gallagher stated, “All the while continuing to deliver on our vital work for NASA and the nation, this week’s action is essential to securing JPL’s future by creating a leaner infrastructure, focusing on our core technical capabilities, maintaining fiscal discipline, and positioning us to compete in the evolving space ecosystem,” according to NBC News. Technical, business, and support positions throughout the Pasadena-based facility will be impacted by the layoffs. This week, each employee will receive a unique status update.
US Administration facing Financial Crunch and Political Headwinds
However, the centre faces political and budgetary challenges, just like NASA as a whole. As part of a larger federal effort to reduce the size of the government workforce, the agency has maintained budget and staffing cuts in recent years. For many years, the Jet Propulsion Laboratory, which is run by the California Institute of Technology and receives federal funding from NASA, has been essential to US space exploration.
It developed, constructed, and managed all five of the rovers that made a successful landing on Mars in addition to building the country’s first satellite, Explorer 1, which was launched in 1958. Since Donald Trump assumed office, around 4,000 NASA employees have already left the agency on deferred resignation plans, according to Reuters, reducing the agency’s 18,000-person workforce by nearly one-fifth. In a fresh round of layoffs announced in July, almost 2,000 senior-level employees were targeted for termination.
Trump Office Laying Off Above 4000 Federal Employees
NASA was not specifically mentioned in the wave of over 4,000 federal employees laid off by the Trump administration last week amid the protracted government shutdown, which also affected agencies including Treasury and Health and Human Services. The magnitude of JPL’s layoffs demonstrates the conflict between the need for scientific advancement and budgetary restraint.
The loss of hundreds of highly qualified employees could make project schedules and capabilities more difficult, even though the lab is working on future missions, such as Earth science study and planetary exploration. According to Gallagher, the lab is still dedicated to providing for the public and NASA. He declared, “We are sure that this realignment will improve our capacity to support the country’s leadership in space science and exploration.”
Quick Shots
•NASA’s
Jet Propulsion Laboratory (JPL) to cut 550 jobs, around 10% of workforce.
•Organizational
restructuring to ensure long-term competitiveness and fiscal discipline.
•Technical,
business, and support positions at Pasadena-based facility.
•Director Dave Gallagher emphasizes
focus on core capabilities and leaner infrastructure.
Following the US government’s shutdown on October 1st due to Congress’s failure to adopt a budget or temporary funding package, NASA ceased the majority of its operations. NASA is “closed” until further notice, according to a notification on the agency’s website. The closure comes as federal agencies in Washington shut down for the first time in almost six years due to a lack of agreement among lawmakers on spending.
According to NASA, only operations necessary to safeguard people and property are still underway. This includes keeping an eye on the ISS, assisting spacecraft that are presently in use, and doing planetary defence tasks like watching asteroids. Public involvement, teaching, and research initiatives have all been put on hold.
NASA’s Social Media and Daily Updates on a Mute
According to Reuters, NASA has restricted its communications to critical notifications and stopped posting daily mission updates and social media posts. According to the Associated Press, thousands of NASA workers are currently on unpaid furlough due to the closure.
According to the New York Times, the closure would cause delays in the Artemis program, which aims to send humans back to the Moon. Until funds are restored, testing, scheduling, and logistical work have been put on hold. According to the Wall Street Journal, studies that rely on ongoing financing have been impacted by the suspension of research funded by NASA grants at colleges and labs.
Disruption may also affect contractors who work with the agency. Businesses connected to NASA’s supply chain are evaluating the effects of postponed contracts and funding shortages, according to a Bloomberg report. Similar shutdown have occurred at NASA during previous budget disagreements.
According to CNN, the 35-day government shutdown in 2018–2019 caused thousands of employees to halt work and postponed research missions. According to officials, most scientific and technological advancements are halted during these times, even as critical safety procedures continue.
Staff Left with Limited Work Option
NASA has about 18,000 employees. The majority of public servants have been told not to report to work until funding is restored, according to the Washington Post. During the time off, workers are unable to access government systems or work on their tasks.
A congressional budget standoff preceded the shutdown. Neither a short-term funding package nor a new yearly budget plan could be passed by lawmakers. Noting that essential government functions are impacted, President Joe Biden has encouraged lawmakers to break the impasse. NASA’s operations will continue to be restricted to critical safety functions until a solution is found, and all scientific, research, and exploratory initiatives will be put on hold.
Quick
Shots
•ISS monitoring, active spacecraft support, and
planetary defense continue.
•Daily mission updates and public engagement paused;
only critical alerts shared.
•Moon mission testing, scheduling, and logistics on
hold until funding resumes.
•University and lab projects funded by NASA grants
suspended.
The White House has issued a warning that if US President Donald Trump determines that talks with congressional Democrats to resolve a partial government shutdown have come to a standstill, mass layoffs of federal employees may start.
White House National Economic Council Director Kevin Hassett told CNN’s State of the Union show on 5 September, as the shutdown reached its fifth day, that he thought there was still a chance Democrats would give up and prevent what may turn out to be an expensive political and economic catastrophe.
“President Trump and Russ Vought are lining things up and getting ready to act if they have to, but hoping that they don’t,” Hassett added, referring to the White House budget director. Layoffs will begin if the president determines that the negotiations are completely failing.
Trump Termed it as ‘Democratic Layoffs’
“Anybody laid off, that’s because of the Democrats,” Trump told reporters on 5 September, referring to the possible layoffs as “Democrat layoffs”. Despite the ongoing government shutdown, Trump was present at a US Navy anniversary event in Norfolk, Virginia, on September 5. “I think the show has to go on!” Before leaving the White House for Naval Station Norfolk, Trump posted on Truth Social that it was “a show of Naval aptitude and strength.”
However, Trump accused Democrats of inciting the shutdown and attempting “to destroy this wonderful celebration of the US Navy’s Birthday”, putting the occasion at risk of becoming embroiled in partisan hostilities. Since Trump’s last meeting with congressional leaders, no substantive talks have taken place. The standoff started on October 1, the first day of the federal fiscal year, when Senate Democrats rejected a short-term funding plan that would have kept government departments operating until November 21.
Senate Democratic leader Chuck Schumer stated on the CBS show Face the Nation that only new negotiations between Trump and legislative leaders could break the impasse, saying, “They’ve refused to talk with us.” Democrats are calling for guarantees that the White House will not unilaterally reduce expenditure agreed upon in any agreement, as well as a permanent renewal of the enhanced premium tax credits under the Affordable Care Act (ACA).
Till Now No Conclusive Decision Taken
In an attempt to break the impasse, rank-and-file senators from both parties have had informal discussions on spending and healthcare, but little has changed. When asked if senators were closer to reaching an agreement, Democratic Senator Ruben Gallego responded to CNN, “At this point, no.” On 6 September, the Senate will vote once more on two duelling financing measures, one supported by the Democratic-led House and the other by Republicans.
However, neither one is anticipated to receive the 60 votes needed to move forward. As long as the shutdown lasts, around 750,000 federal employees could be placed on furlough, with an estimated $400 million in lost wages every day, according to the Congressional Budget Office. The 2019 Government Employee Fair Treatment Act guarantees backpay to federal employees, but payments won’t start until the closure is finished.
Quick Shots
•Shutdown entered its fifth day
after Senate Democrats rejected a short-term funding bill on Oct 1.
In its ongoing competition with the United States for technical supremacy, China has presented a comprehensive strategy to increase its influence in AI governance, which includes the establishment of a global cooperation organisation.
China Proposes Global AI Oversight Body at WAIC 2025
During his speech at the inauguration of the World Artificial Intelligence Conference (WAIC) in Shanghai on 26 July, Chinese premier Li Qiang lamented that “bottlenecks” like the availability of computer chips were limiting AI advancement.
According to Li, there is still a lack of cohesion in the field of global AI governance. When it comes to things like institutional rules and regulatory ideas, there is a world of variation between countries.
He continued by saying that the international community should work together more closely to quickly establish a global framework for AI governance that can garner widespread support. The establishment of “a world AI cooperation organisation” would be aided by China, he declared.
Inside China’s 13-Point Plan for AI Regulation
Following Li’s speech, the foreign ministry released a thirteen-point plan for the international regulation of artificial intelligence. The plan included a safety governance framework, two new UN-sponsored AI conversation venues, and other measures.
The Chinese capital has been touting its “open” innovation and “share indigenous technologies” policies for the past few months. Large language models (LLMs) developed by two of China’s leading artificial intelligence (AI) companies, DeepSeek and Alibaba, are now open-source and accessible to programmers all around the globe.
Part of China’s strategy is to encourage more sharing of critical software and hardware, including semiconductors, and more cooperation on open-source technologies via new international platforms and developer communities. The United States is worried that China’s superior open-source LLMs would threaten Silicon Valley’s worldwide pricing and dominance because of the country’s cheap tech.
Global AI Power Play: Tensions With the U.S.
In light of Washington’s restrictions on shipments to China of sophisticated semiconductors and the machinery used to manufacture AI solutions, as well as its pressure on allies to follow suit, Li’s remarks demonstrate the severe technological rivalry between the two countries.
A Hangzhou-based company called DeepSeek released an LLM this year, which prompted some to question whether the United States could keep its technological advantage. This shows that China is still making progress.
According to Li, China is eager to share more of its answers with the world and add more of its wisdom to the governance of artificial intelligence on a global scale. He elaborated by saying that AI will power a new wave of economic expansion. He emphasised China’s desire to “make the achievements of AI development better benefit the world” by sharing technology with southern nations.
A Geopolitical Showdown Over AI Leadership
Over the course of the four-day artificial intelligence conference and exhibition, China’s foreign ministry extended invitations to high-ranking officials from over forty nations and international organisations. Compared to 2024, when the conference was mostly attended by Americans, this year’s WAIC has seen an increase in international attendees. Yoshua Bengio of Canada, Nobel laureate Geoffrey Hinton, and former Google CEO Eric Schmidt are among the speakers scheduled to appear.
China’s strategy follows the White House’s recent announcement of a plan to make the United States the AI industry leader. Accelerating innovation through reducing bureaucracy, constructing infrastructure, and maintaining US leadership in worldwide AI diplomacy and security were the primary goals.
According to President Donald Trump, Japan, one of the US’s biggest trading partners, has agreed to a “massive” trade agreement with the US. According to Trump’s social media post, the idea would result in Japan investing $550 billion (£407 billion) in America and US imports from the Asian nation being subject to a 15% levy.
Key Highlights of the U.S.–Japan Agreement
He went on to say that Japan will allow American products, such as rice, trucks, vehicles, and some agricultural products, to enter its economy. Shigeru Ishiba, the prime minister of Japan, praised the announcement, stating that it was the lowest number among nations having trade surpluses with the US to date.
Tariff Reductions on US Autos and Agricultural Exports
At a White House event on July 22, Trump boasted that he had recently struck what he believes to be the biggest trade agreement ever with Japan. He went on to say that the squad had put in a lot of time and effort on it, and that Japan has its best personnel here. And it’s a fantastic bargain for all. “I constantly stress that it must be fantastic for everyone.
“It’s a fantastic deal,” Trump said. In an interview with reporters on July 23, Ishiba stated that the deal would reduce US car and part tariffs from 25% to 15%. “We were the first in the world to reduce tariffs on cars and auto parts without any quantity restrictions,” he stated. “The agreement does not include any reduction of tariffs on the Japanese side,” Ishiba stated.
Japan’s Billion Dollar Investment Commitment
Shigeto Nagai of Oxford Economics, a research firm, told BBC News that Japan’s “best compromise at this stage” is to lower its main tariff rate to 15%. The announcement’s mention of Japan’s planned investment in the US “will be a huge boost to restore the US, fitting in with Trump’s story of reviving US manufacturing with more jobs,” he continued.
Political Context in Japan Following the Deal
This month, Trump threatened to impose a 25% tariff on Japan’s exports to the United States unless a new trade agreement was reached by August 1. This was one percentage point higher than the 24% rate that was announced during his so-called Liberation Day on April 2.
Following global market turbulence, the April tariffs plan—which included levies on numerous US trading partners worldwide—was put on hold for ninety days. It gave the trade delegates from Tokyo more time to engage in talks with their Washington colleagues.
Market Reaction: Japan’s Stock Surge
The Nikkei 225, Japan’s benchmark stock index, rose more than 3% on 23 July in Tokyo, driven primarily by advances in shares of the country’s largest automakers, such as Toyota, Nissan, and Honda. The alleged agreement comes as Ishiba faces pressure to resign following the weekend elections that cost his Liberal Democratic Party (LDP) the majority in the nation’s upper house. Last year, the LDP lost its majority in Japan’s lower house, which has more influence.
As part of a reorganisation process, the American mortgage company Fannie Mae laid off 700 workers. Of these, 200 were primarily Telugu-born and were sacked on “ethical grounds” due to financial irregularities. Allegedly, at least 200 Indian-American workers were let go for working with Telugu groups to misuse Fannie Mae’s matching grants programme. One Indian-American congressman has asked the firm for a statement in the wake of the widespread layoffs. Fannie Mae, also referred to as the Federal National Mortgage Association (FNMA), is a government-owned company in the United States. Telugus make up the majority of the 200 employees who were sacked for salary theft, according to sources. The matching grants programme is intended to encourage charitable contributions and is a payout that is an extension of employees’ compensation.
How Employees Misuse Company to Craft the Scam?
The fired employees allegedly worked with charitable groups, some of which were connected to the Telugu community in the US, and fabricated donations to obtain company funding, according to a report released by a media outlet. One of these groups is the Telugu Association of North America (TANA), which is the subject of the dispute. According to the article, one of the fired employees is the spouse of a former American Telugu Association (ATA) president, and another is the regional vice president of the TANA organisation. Already, TANA was being scrutinised for allegedly misusing corporate matching grants. A joint investigation between the FBI, IRS, and DOJ is underway. According to the report, Apple dismissed over 100 workers in January for allegedly abusing its matching grants programme. The workers allegedly conspired with nonprofits to fabricate documents and syphon off matching funds for their own use.
Congressman Putting Blame on Fannie Mae
TANA is not the only non-profit group engaged with the problem, according to people who are aware of the development. Investigations were reportedly underway on other associations as well. On April 9, Indian-American Congressman Suhas Subramanyam stated that he had been informed that Fannie Mae had accused hundreds of his Indian-American constituents of engaging in fraudulent activities and dismissed them without carrying out a thorough investigation or presenting supporting documentation. According to a media report, Subramanyam defended the workers and demanded an “immediate” answer from the business, arguing that they were entitled to due process.
Indian-American lawmakers are now standing up for the Telugu workers who were fired by Fannie Mae. Even though fraud should be treated with zero tolerance, a thorough investigation and procedure should be followed before terminating an employee. For this, the members of Congress are battling it out.
As part of continuing trade talks with Washington, India is considering eliminating import levies on US liquefied petroleum gas (LPG) and ethane. According to media reports, this move is intended to increase fuel imports from the US and is consistent with India’s plan to remove import duties on US liquefied natural gas (LNG). Butane, propane, and ethane—all necessary for the production of petrochemicals and cooking gas—are currently subject to a 2.5% import tariff. India bought 18.5 million metric tonnes of LPG, mostly from the Middle East, for $10.4 billion in the fiscal year 2023–2024. With 65,000 barrels per day last year, India is now the second-largest importer of US ethane after China. However, due to restricted ship availability, storage, and processing capacity, logistical problems make it difficult to increase US ethane imports. Energy Aspects analyst Cheryl Liu pointed out that it will be difficult for the US to boost ethane shipments to India. It is because India appears to have already maximised its usage of ethane as a feedstock due to advantageous present margins. The main purchaser of ethane, Reliance Industries, a significant participant in India’s petrochemical industry, highlights the difficulties in growing this trade.
India Aims to Broaden its Bilateral Trade with US
India’s intentions are a part of a larger trade pact that aims to offset a $45.7 billion trade surplus that now favours India by increasing bilateral trade with the US to $500 billion by 2030. Officials from the finance and commerce ministries will make the final judgement on these duty reductions. Logistical issues continue to be a major obstacle to increasing US ethane imports in the near future, notwithstanding the possible economic advantages. Washington and New Delhi agreed in February to work together on the first phase of a trade deal that is anticipated to be completed by the end of this year. In addition to resolving India’s $45.7 billion trade imbalance, the objective is to increase bilateral trade to $500 billion by 2030. Sources inside the Indian government claim that representatives from the finance and commerce ministries would ultimately decide whether to lower tariffs.
LPG Import the Right Choice for India
Given that India imports over 60% of its LPG needs, the import scenario offers a simpler opportunity for the country. In terms of logistics, it is easier to increase LPG imports than ethane, according to Prashant Vashisth, vice president of Moody’s affiliate ICRA. This approach supports India’s objective of negotiating advantageous economic terms with the US while securing a steady energy supply. India keeps looking for the best ways to strike a compromise between its trade goals and its energy import requirements as trade negotiations move forward. The conversations reveal a calculated desire to increase economic relations with the United States while diversifying energy sources.
The debt of the United States is the national debt that is controlled and acquired by the federal government of the U.S. to the Treasury security holders. According to the report by March 2021, the United States debt crossed over $28 trillion. This came to be so high that this was more than the economic production of the US calculated annually.
With the history of so many years, US debt has been increased by the slump that lowered the tax revenue. However, the Congress government has spent a lot more than this to facilitate the economy over time.
Besides, other services such as the Military have proven to be one of the biggest contributors who have been used for the benefits of medical care and others. And with the world pandemic in 2020-21, the spendings on the counterbalance of the situation has added more to the debt. But the good thing is, all this will be resolved once the pandemic ends.
Till then, other methods such as increasing taxes and a tight budget could help in reducing the debt. And this wide combination of budget growth, tax cutoff and recessions have brought the national debt-to-GDP ratio to a record level. But when there is a problem, to solve it, we have to face some consequences. And so the United States government would have to face the economic consequences.
In this article, we will discuss a case study on the U.S. debt and its GDP. Let’s get started.
The relation of the gross domestic production (GDP) with the national debt of the US has been rising since 2016. And the estimated data shows this would continue till 2026. The graph from 2016 to 2019 has been pretty high in the projection. By the record of 2019, the United States national debt was estimated to be around 108.19% of the GDP.
Total Public Debt as Percent of GDP
United States Finances
The national debt of the United States has had several ups and downs but since the 90s the graph has kept rising. And so as the public debt, which is known as the total money borrowed by the nation to facilitate and cover up the budget deficits. However, the monthly records of debt have been quite stable.
Even after the recession of 2008, the national debt of the United States has proven to be pretty steady and progressive. And the estimations have shown, it will keep rising in the upcoming years. Although the budget cuts and the lower employment opportunities have hurt the American economy, which is still recovering from such a crisis. Therefore, the national debt of the US, as well as the national debt of US per capita, has quadrupled since the last 1990s.
Besides the excessive progress, the national debt of the United States is still not counted among the top 10 highest national debt countries with relation to its GDP. However, countries such as Italy, Japan and Greece have far more figures than the US.
The ratio of debt to GDP
The Debt-to-GDP ratio of a country is calculated as the ratio between the country’s national debt and its Gross Domestic Production (GDP). This ratio measures the country’s currency and is calculated every year. When the Debt-to-GDP ratio comes low that shows that the country is sufficient enough for producing and selling different goods and services and it does not require any further debt for this purpose.
Moreover, many other factors such as wars, interest rates and recessions also affect the debt acquiring and borrowing rates and its choice to incur more debt. However, the countries with the high Debt-to-GDP ratio face different crisis and its recovery takes time. The Debt-to-GDP ratio impacts the country’s economic situation.
Soon after the revolutionary war of 1790, the united state government initiated its footsteps towards the debt. And after the 1790s, the debt has acted as the major help in times of war or economic recession for the U.S. government over centuries.
However in the period of deflation which is known for decreasing the debt size. But, actually, the real worth of debt is enhanced during this period. In the deflationary period, the money value is heightened while the access to loads of money becomes tougher.
According to the record of 2020, estimated by three Congressional Budget Office, the public debt was equal to 98.2% of the GDP. Later, it reached up to 99.4% and 105%. This was the peak of the debt-to-GDP percentage since 1946. In the 1970s, the debt faced several periods, and it stood stable.
But, from the beginning of the 1980s, the debt rose drastically. This was seen till the early 1990s, When the U.S. was under the presidency of Reagan and Bush. However, the ratio came down to 30.9% in 2001. But under the presidency of George W. Bush, it rose again.
Later, the U.S. faced several financial crisis and suffered the Great Depression period as well. This brought a major uprise in the debt percentage and during the presidency of Obama, the debt rose to 75.9% of GDP in 2008 and then, in his second term in 2016, it raised 73.3%.
America’s debt vs GDP
When a country’s debt is estimated it comes incredibly high. And in a country such as America, the value is quite large. However when the national debt is compared with the annual GDP, then only the financial deficits of a country could be measured.
The American debt went stable till 2007, but a drastic change was seen during the global financial crisis period. During this time in 2012, the debt rose to 95% of the GDP. After this, the debt kept on rising. And, during the pandemic of 2020 and 2022, the GDP percentage crossed over 100%.
The United States has faced such an economic situation before also in the 1970s. And, now with the debt of over $27 trillion which includes some mandatory spendings such as health care which requires around $2.7 trillion. The total revenue’s 50% comes from the income taxes of an individual.
The pandemic has made things more delicate and tough and until it is completely over, the economic crisis will continue along with the rising debt-to-GDP ratio. Well, in this article, we briefly discussed the American debt and its cooperation with the GDP.
FAQ
What is the current debt of United States?
The current U.S. debt is $23.3 trillions as of 2020.
Which country has no debt?
Brunei is one of the countries with the lowest debt. It has a debt to GDP ratio of 2.46 percent among a population of 439,000 people.
How much is the world in debt 2020?
The global debt total is at all-time high of $281 trillion by the end of 2020.
Ultra-Millionaire Tax is a wealth tax that is introduced for the richest people in the U.S.A. It is a new bill that is introduced by Senator Elizabeth Warren of Massachusetts. She has been proposing to introduce this for a long time.
Senator Elizabeth Warren introduced the Ultra-Millionaire tax with Representative Brendan Boyle of Pennsylvania And Representative Pramila Jayapal of Washington. The main aim of the new bill is to fight for wealth inequality in the country.
The wealth tax would force the American households whose income is more than $50 million to pay taxes.
Lets dive deeper to understand what is this tax all about
The American households whose net worth is in-between $50 million and $1 billion will have to pay a 2% wealth tax. For example, if the household is earning $50 million then they will have to pay $100,000 in the form of wealth tax.
The American households whose net worth is more than $1 billion will have to pay a 3% wealth tax. For example, if the household is earning $2 billion, then it will have to pay $60 million in the form of wealth tax.
The households earning below $50 million will not come under the tax bracket. 0.05% of the American households will come under the proposed tax bracket according to a press release.
Evasion Methods
The Ultra-millionaire tax has anti-escape measures been taken under consideration. The country will invest an amount of $100 billion to strengthen the IRS (Internal Revenue Service) who is responsible for collecting the taxes. There will be a minimum of 30% audit rate for the taxpayers who are responsible for paying the wealth tax.
If the U.S citizens who have an income of more than $50 million would want to leave the country or move their assets and citizenship to another country, then they would have to pay an exit tax of 40%. There would be penalties implements for underpayment of the wealth tax.
Top Richest Americans
Reasons for the new Ultra-Millionaire Tax
The main reason for the implementation of the new bill is to reduce the wealth inequality in-between the American Households in the country.
Let’s take an example – consider two people A and B. A’s father is a millionaire with an income worth $50 million, pieces of jewelry, collectibles, and yachts. A earns an income of $50,000 and B comes under the American household who earns an income of $100,000. B’s income is also $50,000.
But even though A has a lot of assets and income generated in his family he will have to pay the same amount of tax that B is paying. Increasing the income tax would affect B more than that of A and that is why the wealth tax is implemented.
Wealth tax is calculated based on the entire income of the family and not just an individual.
According to an analysis conducted by economists Emmanuel Saez and Gabriel Zucman from the University of California-Berkley, The American wealth of the richest that is 0.1% of the population has seen their income triple from 7% to 20% in the years 1970-2016 and the rest of the 99.9% has seen a decline in their share of wealth from 35% to 25% in the years 1970-2016.
The richest families of America are 13,000, they have the same amount of wealth as the rest of the 117 million families in the country. According to their study, they’ve found that the top 0.1% pays around 3.2% of their income as taxes while the bottom 99.9% pays around 7% of their income as taxes.
Amount Owed by the Richest for Ultra-Millionaire Tax
According to the Tax rates which is proposed by Elizabeth Warren, Amazon’s Jeff Bezos will have to pay $5.7 billion as a wealth tax for the year 2020. Jeff Bezos would still have $185 billion in net worth after paying the tax.
Tesla’s Elon Musk will have to pay $ 4.6 Billion as a wealth tax for 2020. Elon Musk would still have $148 billion in net worth after paying the tax.
Microsoft’s Bill Gates will have to pay $ 3.6 billion as wealth tax for 2020 and Facebook’s Mark Zuckerberg will have to pay $3 billion as wealth tax for 2020.
According to a survey conducted by CNBC on Millionaires, it was seen that around 60% of the millionaires support the wealth tax proposed by Elizabeth Warren.
FAQ
How many billionaires are there in India?
There are 177 billionaires in India as of 2020.
Who is the richest billionaire in India?
Mukesh Ambani is the richest billionaire in India.
Who is richest woman in India?
Roshni Nadar Malhotra with a wealth of ₹54,850 crore is the richest woman in India.
Conclusion
According to Elizabeth Warren, the implemented wealth tax would raise around $3 Trillion in 10 years. It is said that the tax would raise around 1% of America’s GDP in a year. The revenue would help in paying for child care, developing the educational infrastructure, developing nursing home cares, tuition-free public colleges and schools, and promoting clean energy in the country.
Elizabeth Warren has said that implementing the wealth tax will help in raising money for President Joe Biden’s agenda ‘#BuildBackBetter’ which includes policies like expanding the caregiving economy.
