There is a legitimate debate about the optimal forms of taxation. But he did make higher taxes on the wealthy a key promise, saying no one earning less than $400,000 would pay more. Elizabeth Warren made a 2% wealth tax a trademark policy in the 2020 Democratic presidential primaries, and fellow candidate Bernie Sanders, the senator from Vermont, proposed his own wealth tax.īiden never jumped on that bandwagon. The idea gained steam after the publication of French economist Thomas Piketty’s book “Capital in the Twenty-First Century.” Massachusetts Sen.
Sinema objected to higher rates, which brought the wealth tax into play as an alternative. Those are the two make-or-break Democratic votes in the evenly split Senate. That was his initial proposal, but he’s got to appease West Virginia Sen. The president would rather raise corporate tax rates and rates on wealthy individuals. “There’s a lot of evidence that these things don’t work, and I’ve never heard an explanation of how this could be workable.” WHY WOULD BIDEN GO THIS ROUTE? “It’s just impossible to implement,” said Allison Schrager, a senior fellow at the conservative Manhattan Institute. This means that additional levies such as the global minimum tax and increased enforcement dollars for the IRS would still be needed to help close the gap.Īnd the forecasts for revenue from the wealth tax are highly debatable. This is a meaningful sum, but it’s well shy of the nearly $2 trillion in proposed additional spending over 10 years being negotiated right now. House Speaker Nancy Pelosi estimated Sunday on CNN that the tax would raise $200 billion to $250 billion. During the first year of the proposed tax, the billionaires would also owe taxes on any built-in gains that predate the tax. Under current law, those assets get taxed only when they’re sold.īillionaires would also face an additional tax on non-tradeable assets such as real estate and business interests once those assets are sold. They would be taxed on any increases in value and take deductions on losses. On tradeable items such as stocks, billionaires would still pay a tax even if they held on to the asset.
These standards mean that just 700 taxpayers would face the additional tax on increases to their wealth, according to a description obtained by The Associated Press of the proposal of Senate Finance Committee Chairman Ron Wyden of Oregon.Ģ teens found dead inside car near Raeford elementary school, Hoke County deputies say
This new tax would apply solely to people with at least $1 billion in assets or $100 million in income for three straight years. It could include, once sold, beachfront mansions or the ownership of rare art and antiquities. Some details on the proposed billionaires tax: HOW WOULD IT WORK?Įssentially, billionaires earn the bulk of their money off their wealth. That leaves a special tax on the assets, not the income, of billionaires being proposed by a Senate Democrat as a possible vehicle to help pay for child care, universal pre-kindergarten, child tax credits, family leave and environmental initiatives.īiden has vowed that his programs will not add a penny to the deficit, which means selling to Congress and voters a tax on the wealthiest. But his more conventional proposed rate hikes on the income of large corporations and the wealthiest Americans have hit a roadblock. To help pay for his big economic and social agenda, President Joe Biden is looking to go where the big money is: billionaires.īiden never endorsed an outright “wealth tax” when campaigning last year.