Biden tries again on a wealth tax
The Biden administration is coming around to the idea that deficits are bad and something must be done about them right away. Their proposed fix? Soaking the rich:
The White House will unveil a new minimum tax targeting billionaires as part of its 2023 budget…proposing a tax on the richest 700 Americans for the first time…
The “Billionaire Minimum Income Tax” plan under President Biden would establish a 20 percent minimum tax rate on all American households worth more than $100 million, the document says. The majority of new revenue raised by the tax would come from billionaires.
Because who likes billionaires, right? Then we get into some of the specifics of the idea, and it becomes clear this is a wealth tax – a place even the most cash-grabbing pols have been reluctant to go until Team Biden came to town:
The White House plan would mandate billionaires to pay a tax rate of at least 20 percent on their full income, or the combination of traditional forms of wage income and whatever they may have made in unrealized gains, such as higher stock prices.
Billionaires paying a rate below that will have to pay the difference between what they pay now and the 20 percent rate. Billionaires already paying more than 20 percent would not owe additional taxes. The taxes paid toward the minimum tax would count toward whatever billionaires owe once they have to pay ordinary capital gains taxes.
“The Billionaire Minimum Income Tax will ensure that the very wealthiest Americans pay a tax rate of at least 20 percent on their full income,” the White House document says. “This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.”
So if assets decline in value – losing money (on paper), would the tax still apply? That’s not clear from the press releases, but the safe bet is the government would find a way to take its cut.
And while the talking points have this applying only to a few very rich folks…well, so was the income tax, way back in the day. And the alternative minimum tax? That was designed to catch rich folks in the net, too. Both have grown far beyond their initial bounds, so there is no historical reason to believe a wealth tax wouldn’t be extended as far down the income scale as politicians desire.
The bottom line: The left may want to tax the rich today. They will inevitably apply the tax to you tomorrow.