Oct 27, 2021 - Politics & Policy

Senate Democrats unveil new income tax for billionaires

Picture of Sen. Ron Wyden

Sen. Ron Wyden. Photo: Drew Angerer/Getty Images

Senate Democrats on Wednesday released a billionaires' tax proposal, designed to help support President Biden's social spending and climate change legislation.

Why it matters: Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, said the Billionaires Income Tax would raise "hundreds of billions of dollars" and would affect approximately 700 taxpayers who have more than $1 billion in assets or incomes of over $100 million a year.

Details: "Under today’s tax system, [billionaires] don’t have to pay capital-gains taxes unless they sell their assets, and they can borrow against that wealth to finance their lifestyles," the Wall Street Journal writes.

  • The new plan would require billionaires to give the IRS a detailed account of how much the assets they own gained or lost each year.
  • It will ensure "the wealthiest people in the country pay their fair share toward historic investments in child care, paid leave and addressing the climate crisis," said Wyden, who released the proposal.

The big picture: The unveiling of the plan comes as Biden and congressional leaders race to finish — and figure out how to pay for — their nearly $2 trillion social spending and climate package.

  • The billionaires' tax gained currency over the weekend because Sen. Kyrsten Sinema (D-Ariz.), a moderate and key negotiator, signaled her opposition to corporate, personal and capital gains tax hikes, Axios' Hans Nichols writes.

Yes, but: Multiple Democrats in the House and Senate are skeptical of the billionaires' tax proposal, including Sen. Joe Manchin (D-W.Va.), both for its implementation and its likelihood of getting tied up in the courts, reports Axios' Alayna Treene.

  • It would also fundamentally change the country’s tax system.

Of note: Senate leaders unveiled a separate plan to impose a 15% minimum book tax on corporations with more than $1 billion in profits.

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