Ron Wyden, Chairman of the Senate Finance Committee, revealed on Wednesday a proposal to tax the unrealized gains from U.S. billionaires’ assets to raise funds for President Joe Biden’s social and climate-change initiatives. Republicans and tax policy experts are already voicing their concerns.
U.S. Billionaires Tax
As informed by Reuters, the so-called billionaires tax announced by Ron Wyden, is one half of a two-part legislative plan that includes a proposed 15% corporate minimum tax on the most profitable U.S. companies.
According to Wyden and Democratic Senator Elizabeth Warren, the move is intended to tackle tax avoidance by the biggest firms in the country and could result in hundreds of billions of dollars to support Biden's $2 trillion “Build Back Better” legislation.
“The White House backs the corporate minimum tax, which would dovetail with a global corporate minimum tax recently agreed by 136 countries and aimed at corporations that pay little or no tax by gaming the international tax system,” Reuters reports.
However, the billionaires' tax is up against some fierce opposition from Democrats in the House of Representatives, who believe that hiking tax rates upfront is a better way to fund the Biden agenda.
A statement asserts that around 700 taxpayers whose assets are worth over $1 billion or whose annual income surpasses $100 million for three years in a row, would be covered by the proposal –which would go into effect for the 2022 tax year.
Ron Wyden was quoted as saying on CBS News: “This is a billionaires income tax, it's not a wealth tax. It's a billionaires income tax.”
“And we expect that these billionaires and there's something like less than 800, who made close to $2 trillion during the pandemic, would pay a tax, their fair share, every year just like nurses and firefighters.”
According to the plan, “stocks and bonds would be marked-to-market yearly and taxed on what are called ‘unrealized’ gains,” which are the increase in value of a stock every year even in investor’s possession.
Real estate is also part of the U.S. billionaires' tax plan, which would involve an additional interest charge –deferral recapture amount– when they sell a property, on top of the regular capital gains tax.
"I've always felt that success was giving everybody in America the chance to get ahead and what we're dealing with is flagrant loopholes in the tax code," Wyden said.