Senior Democrats have drawn up a detailed new tax plan to hit nearly 700 American billionaires in an attempt to raise revenue from the super-rich to pay for Biden’s $ 2tn flagship spending plan.
Ron Wyden, chairman of the Senate Finance Committee, said Wednesday that the plan would apply to taxpayers with annual revenues of more than $ 100 million or assets of more than $ 1 billion for three consecutive years.
This would include treating any of their tradable assets, such as shares, on a mark-to-market basis each year – a major departure from their traditional behavior under U.S. tax policy where they would normally be taxed if sold.
“The billionaire’s income tax will ensure that billionaires pay taxes every year, just like working Americans. No working person in America thinks they pay their taxes and billionaires don’t,” Wyden said. “We have a historic opportunity with the Billionaire Income Tax to restore fairness to our tax code and fund significant investments in American households.”
Widen rushed to introduce the billionaire tax plan after Arizona Democratic Senator Kirsten Cinema scrapped billions of dollars in revenue, including capital gains, by raising corporate and personal income tax rates from the White House and senior Democrats.
Although Wyden said the billionaire tax would bring in billions of dollars in revenue, it would leave many wealthy U.S. families untouched in their tax treatment. It is also unclear whether there will be enough support among Democrats for the billionaire tax in the final expansion of the talks.
Widen’s move comes a day after Democrats announced a minimum tax plan on corporate profits for 200 of America’s largest companies in an effort to offset the prospect of not raising corporate income taxes.
Wyden – who unveiled the proposal along with Massachusetts Progressive Democratic Senators Elizabeth Warren and Angus King of Maine – said the move would require companies that report shareholders’ profits of more than $ 1 billion and pay them back at least 15 percent in taxes. . The proposal would apply to about 200 corporations.
King later told reporters that the plan would increase revenue from $ 300 billion to $ 400 billion over a 10-year period.
The changes, which will limit companies’ ability to use tax gaps and demand cuts to reduce their tax base, are designed to offset the cost of Biden’s legal plan to pour federal funds into early childhood education, public health care and clean energy.
Senators Warren, King and Wyden said their plan was designed to prevent America’s largest corporations from avoiding paying federal taxes. The senators cited the example of Amazon, which has reported a 4.3 percent tax rate on its profits despite reporting $ 45 billion in profits over the past three years – compared to the current corporate tax rate of 21 percent.
In a significant endorsement of the proposal, Cinema issued a statement calling the planned tax changes a “common sense measure” to ensure “highly profitable corporations – which can sometimes avoid the current corporate tax rate – pay a reasonable minimum corporate tax on their profits”.
Cinema had earlier proved a thorn in the side of the Biden administration when he made it clear that he opposed the White House’s proposal to increase the U.S. corporate tax rate from 21 percent to 25 percent, as well as taxes for the country’s richest families with increased personal income and capital gains.
The White House initially suggested raising the corporate tax rate to 28 percent, in part as part of former President Donald Trump’s 2017 tax cut, but further discussions on Capitol Hill initially see the 25 percent standard as more feasible.