Senate Democrats unveil a plan for a new tax on billionaires

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Sens. Elizabeth Warren, D-Mass., and Ron Wyden, D-Ore., speak to reporters Tuesday about a corporate minimum tax plan. On Wednesday Wyden unveiled another tax proposal, this one aimed at billionaires.





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How the billionaire tax would work


The tax proposal would apply to just about 700 taxpayers, Democrats say — people who earn more than $100 million per year or who have more than $1 billion in assets for three straight years. It would require them to give the IRS a detailed account of how much the assets they own gained or lost each year, a process called mark to market.

Most of the gains on tradeable assets like stocks would be taxed at the existing capital gains rate, which is currently 20% for individuals earning over $445,850.

The tax applies differently for more complicated assets, like real estate or business interests, known as non-tradeable assets. Those would only be taxed once when the asset is sold and would include an additional fee similar to an interest payment.

The legislation also has details that would aim to prevent billionaires from trying to avoid the tax by moving money to different private companies or trusts, or by just giving money away as a gift.

Democrats say they expect the bill could raise hundreds of billions of dollars but they have not yet received an official estimate from the nonpartisan score keepers in Congress.


Some House members are skeptical


The billionaire tax is one of the more controversial tax elements in the evolving spending package. Some House members in particular have expressed skepticism about how it would be administered.

House Ways and Means Committee Chair Richard Neal, D-Mass., told reporters on Tuesday that he has repeatedly expressed concerns about the plan.

The billionaire tax was released shortly after Wyden and other Democrats introduced a proposal to impose a 15% minimum tax on roughly 200 companies with more than $1 billion in profits.

The plan would not change the top corporate tax rate, as Biden had previously proposed. Instead, the measure would go after companies that have previously avoided paying any tax at all.

Sen. Elizabeth Warren, D-Mass., one of the sponsors of the plan, said it is a way to make that avoidance harder.

«Giant corporations have been exploiting tax loopholes for too long,» Warren said. «It’s about time they pay their fair share to help run this country, just like everyone else.»