The Biden administration is planning to propose a new minimum tax requirement for America’s wealthiest families.
Context: President Biden and Democrats have been proposing new ways to raise more tax revenue from wealthy Americans, however, have often fallen short of proposals for Biden economic agenda gaining approval from the whole party.
What Happened: As part of his annual budget, President Biden will propose a new minimum tax on households worth more than $100 million.
What It Means: The new tax would impact less than 200,000 American households according to a White House fact sheet.
The tax plan would apply only to those who don’t pay at least 20% in tax on a combination of income as typically defined and their unrealized gains on unsold assets such as stocks and closely held businesses. (per The Wall Street Journal)
What Biden Says: According to a White House fact sheet, the plan would generate roughly $360 billion in revenue over 10 years.
The money would largely come from taxes on unrealized gains built up over many years, which could likely include much of the wealth of founders of large corporations like Amazon Inc. and Facebook parent company Meta Platforms Inc.
Why It Matters: If Biden’s proposal succeeds it would mark a significant change in how income is defined for tax purposes, creating a whole new separate tax structure that would capture rising asset values for the government even before those assets are sold. (per The Wall Street Journal)