(FreedomBeacon.com)- A new wealth tax could be coming if President Joe Biden gets his way.
Part of the president’s new request for fiscal year budget is a plan that would require the ultra-wealthy to pay a tax rate of at least 20%. This would apply to both their overall income as well as their unrealized gains in things such as stock portfolios. Right now, those things aren’t taxed at all.
According to the Biden administration, this new wealth tax would only affect the top 0.01% of all households in America. It would also generate roughly $360 billion in revenue for the government over the next 10 years, half of which would come just from billionaires.
In a summary of Biden’s proposal, the White House said:
“For too long, our tax code has rewarded wealth, not work, and contributed to growing income and wealth inequality in America. This minimum tax would make sure the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.”
Democrats have been working in recent months to try to revive their plans for a reconciliation bill to pass through Congress. Liberals only have a few more guaranteed months of full control over both chambers of Congress and the White House, so they know their backs are against the wall with this.
The midterm elections in November could ultimately remove the option for budget reconciliation, if Republicans were able to retake control of the House or the Senate. It’s looking very possible that the GOP has a good shot at retaking both.
The problem with this latest proposal from the president is that rank-and-file members of the Democratic Party have rejected similar proposals for a wealth tax in the past that were brought forth by Senator Ron Wyden of Oregon and Elizabeth Warren of Massachusetts.
It’s also possible that if the bill were to pass, Republicans might challenge it based on it being a violation of the Constitution regarding a restriction on taxation.
The Biden administration says the president’s overall 2023 fiscal budget request, which was released on Monday, would reduce the U.S. deficit by $1 trillion over the next decade.
America currently has a progressive tax system, and it works for much of the country. The Treasury Department, for example, says that the top 0.1% of earners in the country who make more than $2.8 million annually, pay an average federal tax rate of 31.8%.
There are holes in the progressive tax system, though, once you deal with the ultra-wealthy. Many of these people are able to significantly slash their overall tax bills, and some are even able to pay no taxes at all.
Some strategies they take to do so include borrowing against holdings they have in stock, because those aren’t subject to tax until they are sold.
Democrats have tried on many occasions to fix what they’re calling a problem, but they’ve been unable to make any progress on it.
Will Biden’s bill finally make some progress in that regard? It’s uncertain at this point, but the liberals are certainly going to try hard.