On Monday, the White House unveiled President Joe Biden’s 2023 budget proposal, which includes a minimum tax on the nation’s wealthiest people, a measure that progressive lawmakers and advocates have long called for.
The “Billionaire Minimum Income Tax” would subject householdsThe minimum tax rate of 20% applies to all assets worth more than $100 million. The tax would tax both salaries and unrealized gains from assets such as stocks and bonds. It is similar to other wealth tax proposals by Democratic lawmakers.
The tax is projected to raise roughly $360 billion in revenue, the majority of which would come from the nation’s 700 billionaires. The budget proposal would reduce the federal deficit to more than $1 trillion in the next 10 years.
The proposal is likely to be supported by progressive and Democratic lawmakers in Congress. Tried to passA similar measure was introduced in the Build back Better Act last year, which was sabotaged this year by Senators Kyrsten SInema (D–Arizona), and Joe Manchin (D–West Virginia). It’s unclear if the two conservative lawmakers would support Biden’s proposal.
“This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters,” the document detailing the tax says. “[T]his new minimum tax will eliminate the ability for the unrealized income of ultra-high-net-worth households to go untaxed for decades or generations.”
Billionaires pay tax rates that are extremely low in comparison to the wealth they have. An analysis by the Office of Management and Budget and White House Council of Economic Advisers last year found that between 2010 and 2018, the nation’s wealthiest 400 billionaire families paid only 8.2 percent of their income on average, which is lower than even the lowest federal income tax rateFor low-income earners, 10%
Moreover, billionaires don’t owe taxes on the vast majority of their wealth; people like Elon Musk Jeff BezosThey deliberately set low salaries to avoid federal taxes. They don’t have to pay taxes on their stocks until they sell them, and the taxes on stock salesThe price of stocks sold for is often lower than the value of their stock.
Because of the nation’s lax tax code for billionaires, the top roughly 0.002 percent are given free license to accumulate more wealth than any individual could ever need.
Earlier This month, a report by Americans for Tax Fairness found that the nation’s billionaires have gained $1.7 trillion in wealth during just the past two years, marking a 57 percent growth in their collective net worth. These gains alone could be nearly worth the investment. The total amount of student debtBorrowers in the U.S. would owe the tax, but they would not be taxed under current tax laws.
“In a tax system full of special favors for the wealthy, none is more outrageous than the ability of billionaires with skyrocketing fortunes to go tax free year after year or pay much less than they should owe,” Frank Clemente, executive director of Americans for Tax Fairness, said in a statement on Monday. “President Biden’s Billionaires Income Tax takes a historic step to bringing us closer to a single system in which the ultrawealthy start paying taxes each year on their wealth gains the way workers pay taxes on their paychecks.”
This proposal will be a winner for Biden. Polling It has been foundA majority of likely voters across all political spectrums believe that billionaires should pay more taxes, and that these taxes should include unrealized capital gains.
