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Biden Budget Targets Billionaires With 20% Minimum Tax

Biden Budget Targets Billionaires With 20% Minimum Tax
IRS building (Getty)

By    |   Monday, 28 March 2022 02:15 PM EDT

President Joe Biden will ask Congress to approve the "billionaire minimum income tax" which would assess a 20% minimum tax rate on U.S. households worth more than $100 million. Over half the revenue could come from those worth more than $1 billion, CNBC reported.

If a wealthy household is already paying 20% on their full income, they won’t pay an additional tax under the proposal. If they pay less than 20%, they’ll owe a "top-up payment" to meet the new minimum, CNBC reported.

Though investments have long avoided taxes until they’re sold for a profit, the proposal would count the appreciation in value of a billionaire’s investments, like stocks and bonds, as income even if the assets aren’t sold, Forbes reported.

According to the plan, the tax would raise an estimated $361 billion over the next decade, with more than half the revenue coming from billionaires alone, according to Forbes.

According to the Treasury, the top 1% of taxpayers, ranked by income, failed to pay about $163 billion in taxes last year, making up about 28% of total unpaid taxes, Forbes reported.

The wealthiest Americans account for the bulk of tax evasion because higher-income taxpayers have the financial resources to "tap into the services of accountants and tax preparers who help shield them from bearing their true income tax liability," the Treasury said in September.

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, even less than the average American, Forbes reported.

The idea of imposing a type of wealth tax has gained traction since Biden was elected as Democrats have looked for ways to fund their sweeping climate and social policy agenda and ensure that the wealthiest Americans are paying their fair share, The New York Times reported.

Last year a Senate plan to tax the wealthiest Americans did not pass. It’s still unclear whether Biden’s proposed billionaire tax can ultimately make its way through Congress, Forbes reported.

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Politics
President Joe Biden will ask Congress to approve the "Billionaire Minimum Income Tax" which would assess a 20% minimum tax rate on U.S. households worth more than $100 million.
billionaire, tax, budget, biden
342
2022-15-28
Monday, 28 March 2022 02:15 PM
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