Why Biden’s billionaire minimum income tax can be a tough sale

Josh Gottheimer, DN.J., speaks to reporters on November 4, 2021 in Washington.

Elizabeth Frantz | Reuters

President Joe Biden has proposed a new tax on the super-rich as part of his 2023 federal budget, which aims to reduce the deficit by about 60 360 billion.

Some experts say it is unlikely to gain traction in Congress.

According to a White House fact sheet, the “billionaire minimum income tax” calls for a 20% tariff on households with a net worth of more than $ 100 million, affecting the top 0.01% of earners.

The 20% tax applies to “gross income”, which includes the taxable earnings and so-called unrealistic capital gains, or the increase in assets, the option to pay installments, and the credit to avoid double taxation on the same assets, as outlined by the US Treasury Department. .

More from personal money:
The House has passed the Secure Act 2.0. Here’s what it means for retirement benefits
Biden has proposed a tax increase on married filers earning more than 50 450,000
Biden’s budget marks $ 14.8 billion for social security. How would that help

The administration says the plan will raise about 60 360 billion over the next decade. However, the proposal has already faced pushback.

“The billionaire tax and how they’ve put it forward doesn’t make much sense,” Republican Josh Gottimer, vice president of the Caucus, told CNBC’s “Squawk Box” on Wednesday.

“I don’t really think the proposal is going anywhere,” he added.

Senate Democrats introduced a similar billionaire tax in October to fund their domestic spending agenda. However, the proposal failed to garner widespread support within the party.

I think it’s going to be a tough sale for him, really.

Howard Gleckman

Senior Fellow of the Urban-Brookings Tax Policy Center.

Moreover, if the levy survives the negotiations, some policy experts say it could face legal challenges and the extra burden of fighting IRS law enforcement.

According to Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, the Biden version of the billionaire tax bill could create administrative challenges for some taxpayers, such as business owners who fall above the 100 million threshold.

“Their assets are in their business,” he explained. “And it’s very difficult to value those assets.”

Many European countries have abandoned similar taxes because of their understanding of the value of personal assets, Gleckman said.

“I think it’s going to be a tough sale for him, to be honest,” he said, pointing to the pushback within the Democratic Party.

The budget includes other revenue increases that affect individuals, such as the increase in the top marginal tax rate, higher tariffs on capital gains for those earning more than $ 1 million, and the transfer of property among others as a sale.

However, many of these provisions have already been overturned, and Democrats have limited time to pass their legislative agenda before the focus shifts to the midterm election campaign.

Leave a Reply

Your email address will not be published.