Topline
The White House will propose a direct tax on the 700 richest Americans as part of its 2023 budget proposal, the Washington Post reports, aiming to raise an estimated $360 billion over 10 years off a group that pays a much lower effective tax rate than middle-class Americans.
President Joe Biden walks towards members of the press prior to a Marine One departure from the … [+] White House on March 23, 2022 in Washington, DC. (Photo by Alex Wong/Getty Images)
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Key Facts
President Joe Biden’s “Billionaire Minimum Income Tax” plan would hit households worth more than $100 million with a 20% minimum tax rate, according to documents obtained by the Post and five anonymous sources familiar with the plan.
The Post reports the 20% tax rate would apply to billionaires’ “full income,” including wages and unrealized gains on their investment portfolios, including stocks and bonds, which currently aren’t subject to taxes until they’re sold at a profit.
Billionaires paying below 20% in taxes on this expanded definition of income will have to make up the difference, while anyone paying more than 20% will not owe additional taxes, according to the Post.
The White House Office of Management and Budget and the Council of Economic Advisers estimated 400 billionaire households paid an average 8.2% of their income in federal taxes between 2010 and 2018—a lower rate than most ordinary Americans.
The Associated Press first reported Biden’s proposed 2023 budget also aims to cut the federal deficit by $1 trillion over the next decade.
What We Don’t Know
Whether the budget proposal will receive broad support from members of Congress. Several previous efforts to tax billionaires have failed. Sen. Ron Wyden (D-Ore.) unveiled a Billionaires Income Tax in October, which would have taxed stock gains and other “unrealized assets” on a yearly basis, but House Speaker Nancy Pelosi (D-Calif.) reportedly objected to Wyden’s plan on a call with senior Democratic officials, calling it a publicity stunt.
What To Watch For
The Post and the Associated Press report the White House is expected to reveal the budget proposal Monday.
Crucial Quote
“The Billionaire Minimum Income Tax will ensure that the very wealthiest Americans pay a tax rate of at least 20 percent on their full income,” a White House document reviewed by the Post reportedly said. “This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.”
Further Reading
President Biden to unveil new minimum tax on billionaires in budget (The Washington Post)
