Biden’s Budget to Include Billionaire Tax Proposal
The proposal to tax billionaire households aims to ensure the wealthiest Americans pay at least 20% on their income and unrealized asset gains. (Photo by Win McNamee/Getty Images)
President Biden will propose a new minimum tax on households worth more than $100 million as part of his annual budget, the White House said Saturday, in a bid to ensure the very wealthiest Americans pay at least 20% in tax on their income and rising asset values each year.
The proposal would affect fewer than 20,000 households, and it would apply only to those who don’t pay at least 20% in tax on a combination of income as typically defined and their unrealized gains on unsold assets such as stocks and closely held businesses. The plan would generate roughly $360 billion in revenue over 10 years, according to a White House fact sheet released in advance of Monday’s full budget proposal. That is about twice as much money as raising the top individual income-tax rate to 39.6% from 37%, and it would affect a much smaller group of people.
The biggest chunk of money in the new Biden plan would come from taxes on unrealized gains built up over many years, which could include much of the wealth of founders of large technology companies such as Amazon.com Inc. and Facebook parent Meta Platforms Inc. Those people could spread their initial payments over nine years; subsequent annual minimum taxes could be spread over five years.
There would be no exemptions for particular asset classes, but there would be special rules for illiquid taxpayers. People wouldn’t have to make annual valuations of illiquid assets, and they could defer some taxes—with interest charges—until death or asset sale.
The proposal is the latest Biden administration effort to capture more revenue from the capital gains of wealthy Americans. Like other Democratic ideas, it would mark a significant change in how income is defined for tax purposes, creating a whole new separate tax structure that would capture rising asset values for the government even before those assets are sold.
This story appeared in The Wall Street Journal. Read more here.