Sen. Joe Manchin, D-W.Va., declined to support President Joe Biden's new plan of imposing a 20% minimum tax on billionaires Tuesday, according to The Hill.
The centrist senator questioned the legality of Biden's unprecedented proposal — which was unveiled to Congress on Monday — despite the selling point of potentially raising $360 billion in deficit-reducing revenue.
"You can't tax something that's not earned — earned income is what we're based on," Manchin said. "There's other ways to do it. ... Everybody has to pay their fair share, that's for sure. But unrealized gains is not the way to do it, as far as I'm concerned."
With Manchin opposing Biden's plan, as currently constituted, Senate Democrats would likely have difficulty garnering a majority vote for the proposal.
The "Billionaire Minimum Income Tax" program also has a misleading moniker, since the new tax rate would apply to U.S. households worth more than $100 million. The rationale of the proposal: More than half the revenue would come from people or households with a wealth value exceeding $1 billion.
The new proposal reasons: "The minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters."
Senate Finance Committee Chairman Ron Wyden, D-Ore., who announced his own plan for taxing the unrealized gains of billionaires last October, supports the Biden proposal, The Hill reports.
"Here's what [rich people] do," Wyden explained. "They go to their accountant. They tell their accountant, 'Make sure I don't make any income, any salary.' And then they say, 'Make sure I can buy, borrow and die.' And nobody knew anything about that years ago, and now people are pretty up on it."
Wyden's analogy aside, it could be tough to generate concrete support for any bill that taxes general wealth, or even hints of double taxation.
"The problem with that particular tax is that it's a tax on unrealized gains," says Senate Minority Whip John Thune, R-S.D.,, a member of the Senate Finance Committee.
Thune added: "It's essentially taxing people before they actually get the income, and that seems like a really dangerous precedent in tax law. Because if you have a gain one year and then a huge loss the next year, how's the government going to pay people back for their losses?"
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