New polling finds that most likely voters support President Joe Biden’s plan to implement a minimum tax on the richest households in the U.S., including a tax on unrealized gains from assets like stocks.
The polling results were released Monday by Data for Progress finds that 59 percent of likely voters support the proposal, known as the Billionaire Minimum Income Tax, with only 31 percent of those polled in opposition — a 28-point margin.
This issue is especially popular with Democrats, with 72 per cent of respondents supporting it. 55 percent of independent voters favored the proposal. A plurality of Republicans support the idea with 46 percent supporting it and 43 percent opposing. 54 percent of respondents said that they support the idea for people who own stock and real estate.
Biden recently submitted his budget request for Fiscal Year 2023 to Congress, which includes a minimum tax on the country’s richest roughly 20,000 households, or those worth over $100 million. These households These would be subject toA minimum 20% income tax rate. This would include traditional incomes, as well as unrealized gains, such as stocks or bonds. It would be similar to a wealth tax.
Democrats and progressives have long supported a tax on the wealthiest Americans. They often can take advantage of loopholes in the tax code to pay low effective tax rates. ProPublica recently revealedBetween 2014 and 2018, the 25 wealthiest Americans were paid only 3.4 percentDespite having accumulated a staggering $401 billion over that period, they still have a lot of wealth in taxes. A slightly more extensive analysis was done last year. White House economists found that the country’s wealthiest 400 families only paid a tax rate of 8.2 percent in income taxes between 2010 and 2018.
Partly because of a favourable tax environment, the wealthy can afford to pay such low effective rates of tax. strategy known as “buy, borrow, die,”The richest Americans can buy stock and then borrow loans with very low interest rates from their stock portfolios. Then, they hold onto stocks — since they would have to pay taxes if they sold them — and eventually pass them onto their heirs, largely tax-free.
However, Data for Progress’s polling shows that many Americans are unaware of how taxes apply to people whose wealth largely comes from their assets. When presented with a hypothetical scenario in which a household held stocks that increased in value that year but didn’t sell the stocks, 28 percent of people incorrectly said that the household would have to pay taxes on the increased value of the stock. The proportion of people who have never owned stock or real estate grew to 30%.
This misunderstanding could explain why there isn’t more support for the proposal to retool how the richest Americans are taxed. While 66 percent of likely voters surveyed believe that billionaires should be paying more in taxes, 19 percent believe that they are paying the right amount — despite the fact that billionaires pay much lower effective tax rates than the average taxpayer, and are able To maximize their wealthTo manipulate markets in their favor.
It’s unclear if Biden’s proposal will end up in the final budget for next year. Lawmakers like Senators Ron Wyden (D-Oregon) Bernie Sanders (I-Vermont)Although they have introduced bills directly aimed to tax billionaires, they have not gained traction in Congress. However, polling suggests this legislation could help Democrats gain support from voters, which could be crucial in the fall’s midterm elections.
The wealth gap will grow if Congress doesn’t act on the issue sooner. Recent analysis by Americans for Tax Fairness foundThe pandemic has made billionaires $2 trillion richer, a staggering 70% increase in their wealth. The pandemic has benefited Elon Musk in particular, with his wealth increasing by 1080 percent in the past two years.