Senate Democrats are crafting a plan to tax billionaires and other ultra-high earners in order to pay for the bulk of President Biden’s signature economic spending plan after failing to secure enough support for a slew of other planned tax increases.
Senate Finance Chair Ron Wyden, D-Ore., is slated to unveil a tax on the unrealized capital gains of the ultra-wealthy this week, Treasury Secretary Janet Yellen said during an interview on CNN. The proposal, which has support from other Democrats, would set the so-called billionaires’ income tax at $1 billion income, or three consecutive years of $100 million or more in income.
“I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized,” Yellen said.
Democrats hope to generate at least $200 billion in new revenue over the next decade from the tax, which would include stocks as well as other assets like real estate. Individuals could claim deductions for annual losses in the value of their assets.
It would affect roughly 700 taxpayers, or about 0.0002% of the richest Americans.
“Raising the rate is not going to cause Jeff Bezos to pay a penny more,” Sen. Elizabeth Warren, D-Mass., told MSNBC on Sunday. Warren has pushed for a tax on the wealthiest Americans for years, rolling out a far more expansive plan during her 2020 presidential campaign. “What we need is a tax that focuses on the wealth of the richest Americans.”
Still, it’s unclear whether the tax, which would be the first of its size and scope in an advanced economy, will be backed by every Senate Democrat and nearly every House Democrat — the required threshold for its passage…Read more>>