Politics Democrats unveil billionaires' tax as Biden plan takes shape
The case for a billionaires income tax
Since the beginning of the pandemic, 745 U.S. billionaires have seen their total wealth increase by $2.1 trillion, a gain of 70 percent. © Istock billionaires Senate Finance Chairman Ron Wyden (D-Ore.) has been pushing what he calls a "Billionaires Income Tax" for some time now, as one of a number of fair tax reforms to pay for President Biden's sweeping "Build Back Better" agenda. With Sen. Kyrsten Sinema (D-Ariz.) obstinately opposing more traditional increases, including raising top individual and corporate rates, this tax on the America's very richest is reportedly now in the center of negotiations.
WASHINGTON (AP) — Pushing past skeptics, Senate Democrats on Wednesday unveiled a newproposal, an entirely new entry in the tax code designed to help pay for President Joe Biden’s sweeping domestic policy package and edge his party closer to an overall agreement.
The proposed tax would hit the gains of those with more than $1 billion in assets or incomes of more than $100 million a year, and it could begin to shore upBiden is racing to finish before departing this week for global summits.
Elon Musk slams Biden over his new billionaires' tax
Elon Musk has slammed President Joe Biden's plan to tax billionaires' income as the Tesla CEO saw his company's value top $1trillion and his personal wealth increase by $36billion.Musk took to Twitter on Monday and responded to a tweet that was critical of the Democrats’ idea for a new billionaires’ tax to help pay for Biden’s social services and climate change plan.
The new billionaires' proposal,, would provide alternative revenue sources that Biden needs to win over one key Democrat, , who had rejected the party's earlier idea of reversing the Trump-era tax breaks on corporations and the wealthy to raise revenue.
Biden met late Tuesday evening with Sinema and another Democratic holdout,, at the White House.
“No senator wants to stand up and say, ‘Gee, I think it’s just fine for billionaires to pay little or no taxes for years on end,’” said Democratic Sen. Ron Wyden of Oregon, chairman of the Senate Finance Committee, helming the new effort.
Manchin raises concerns over billionaires' tax as Democrats scramble to close deal
Democrats are scrambling to close the deal on President Joe Biden's landmark social spending legislation on Wednesday before he leaves on an overseas trip Thursday. At the same time, they were hoping to make enough progress that House progressives would agree to vote for a separate Senate-passed bipartisan infrastructure bill before Biden heads overseas Thursday.
Biden and his party are zeroing in on at least $1.75 trillion in health care, child care and climate change programs, scaling back, as they try to wrap up negotiations this week.
Taken together, the new tax on billionaires and the 15% corporate minimum tax are designed to fulfill Biden’s desire for the wealthy and big business to pay their “fair share.” They also fit his promise that no new taxes hit those earning less than $400,000 a year, or $450,000 for couples. Biden insists all the new spending will be fully paid for and not piled onto the national debt.
While the new tax proposals have appeared agreeable to Manchin and could win over Sinema, whose support is needed in the 50-50 split Senate where Biden has no votes to spare, the idea of the billionaires’ tax hasfrom other Democrats as cumbersome or worse.
Rep. Richard Neal, D-Mass., the chairman of the Ways and Means Committee, said he told Wyden the billionaires' tax may be more difficult to implement that the route his panel took in simply raising rates on corporations and the wealthy.
Why Elon Musk is afraid of the billionaire tax
Think of the billionaire tax as the Tesla solution to Democrats' search for revenue to pay for their expansion of the social safety net if only they can convince Sen. Joe Manchin, the West Virginia Democrat. © Maja Hitij/Getty Images In this September 3, 2020, file photo, Tesla head Elon Musk arrives to have a look at the construction site of the new Tesla Gigafactory near Berlin. Tesla was built on government cash. For years it used government incentives for people to buy electric vehicles.
Under Wyden’s emerging plan, the billionaires’ tax would hit the wealthiest of Americans, fewer than 800 people, starting in the 2022 tax year, according to a person familiar with the plan who insisted on anonymity to discuss it.
It would require those with assets of more than $1 billion, or three consecutive years of income of $100 million, to pay taxes on the gains of stocks and other tradeable assets, rather than waiting until holdings are sold.
A similar billionaires' tax would be applied to non-tradeable assets, including real estate, but it would be deferred with the tax not assessed until the asset was sold, though interest would have to be paid.
Overall, the billionaires’ tax rate would align with the capital gains rate, now 23.8%. Democrats have said it could raise $200 billion in revenue that could help fund Biden’s package over 10 years.
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“I've been talking about this for years," said Sen. Elizabeth Warren, D-Mass., who campaigned for the presidency on a wealth tax, and backs Wyden's approach. “I've even made billionaires cry over this."
Republicans have derided the billionaires’ tax as “harebrained,” and some have suggested it would face a legal challenge.
And key fellow Democrats were also raising concerns about the billionaires’ tax, saying the idea of simply undoingby hiking top rates was more straightforward and transparent.
Under the House bill approved by Neal’s panel, the top individual income tax rate would rise from 37% to 39.6%, on those earning more than $400,000 a year, or $450,000 for couples. The corporate rate would increase from 21% to 26.5%. The bill also proposes a 3% surtax on the wealthiest Americans with adjusted income beyond $5 million a year.
With Sinema rejecting the House's approach to taxes and Manchin panning the new spending on programs, the senators have packed a one-two punch, throwing Biden's overall plan into flux.
That was also forcing difficult reductions, if not the outright elimination, of policy priorities — from paid family leave to child care tofor seniors.
The Billionaire’s Tax Boondoggle Shows the Dems’ Desperation
Democrats promised that taxing the rich could finance a massive expansion of federal benefits. Yet a full Democratic government is having trouble agreeing on even $1 trillion in upper-income taxes. In their desperation, they are turning to a tax proposal so unworkable that no country in the world—not even in tax-loving Europe—has ever imposed it before. It’s a new tax on the investments of billionaires called mark-to-market taxation. Yet noYet no sooner had Sen. Ron Wyden (D-OR) released a draft of the proposal—based off his 2019 framework—than his colleague Sen. Joe Manchin (D-WV) threw cold water on this new billionaire’s tax, asserting that “I don't like it.
The once heftyare losing some punch, too, focusing away from punitive measures on polluters that raised objections from coal-state Manchin, in a shift toward instead rewarding clean energy incentives.
Manchin’s resistance may scuttle one other tax idea — a plan to give the IRS more resources to go after tax scofflaws. He said he told Biden during their weekend meeting at the president’s home in Delaware that that plan was “messed up” and would allow the government to monitor bank accounts.
All told, Biden’s package remains a substantial undertaking — and could still top $2 trillion in perhaps the largest effort of its kind from Congress in decades. But it’s far slimmer than the president and his party first envisioned.
House Speaker Nancy Pelosi told lawmakers in a closed meeting Tuesday they were on the verge of “something major, transformative, historic and bigger than anything else” ever attempted in Congress, according to another person who insisted on anonymity to share her private remarks to the caucus.
Other leading Democrats began to lend their backing to the emerging deal.
“We know that we are close,” said Rep. Joyce Beatty, D-Ohio, the chair of the Congressional Black Caucus, after a meeting with Biden at the White House. “And let me be explicitly clear: Our footprints and fingerprints are on this.”
From the White House, press secretary Jen Psaki said Biden still hoped to have a deal in hand to show foreign leaders the U.S. government was performing effectively on climate change and other major issues. But she acknowledged that might not happen, forcing him to keep working on the package from afar.
She warned about failure as opposed to compromise.
“The alternative to what is being negotiated is not the original package,” she said. "It is nothing.”
Democrats are hoping to reach an agreement by week's end, paving the way for a House vote on a related $1 trillion bipartisan infrastructure bill before routine transportation funds expire Sunday. That separate roads-and-bridges bill stalled when progressive lawmakers refused to support it until deliberations on the broader Biden bill were complete.
Associated Press writers Farnoush Amiri, Darlene Superville and Colleen Long contributed to this report.
COVID-19, corporate taxes, Iran nuclear deal on Biden's agenda for Day One of G-20 summit .
The G-20 summit that opened Saturday in Rome will mark the first time in two years that some of the world's most powerful leaders have met in person.Biden arrived at the modernist, cloud-shaped convention center in Rome where the Group of 20, or G-20, is meeting and was welcomed by Italian Prime Minister Mario Draghi. A few minutes later, he joined other leaders for a traditional "family photo.