Billionaire tax rate expected to be at least 20 percent under new Democratic plan

While Democratic lawmakers have not yet set the new billionaire’s tax rate meant to help pay for President Joe Biden‘s sweeping spending plan, it is expected to be at least 20 percent, the Associated Press reported.

In the emerging plan from Oregon Senator Ron Wyden, who leads the Senate Finance Committee, the 20 percent rate would apply to those with assets of at least $1 billion, taxing any gains they see on stocks and other tradeable assets instead of holding off until holdings are sold. A billionaire’s tax would also be added to non-tradeable assets, though the tax would not be assessed until the asset was sold off, said the AP.

Wyden’s plan would target America’s very richest—likely fewer than 1,000 people—and Democrats are preparing to unveil the proposal within days. With Democrats working to boost the revenue-generating aspects of Biden’s package, Wyden’s plan is also likely to add on other tax measures, such as a plan to have the Internal Revenue Service go after tax delinquents, according to the AP.

For more reporting from the Associated Press, see below.

Oregon Senator Ron Wyden’s plan says a 20 percent rate would apply to those with assets of at least $1 billion. Above, Wyden speaks during the Senate Finance Committee hearing on the nomination of Chris Magnus to be the next U.S. Customs and Border Protection commissioner on October 19, 2021, in Washington, D.C.
Mandel Ngan/Pool/Getty Images

Biden said Monday he’s hopeful the talks with Congress can wrap up overall agreement on the package this week. It’s tallying at least $1.75 trillion, and could still be more. Biden said it would be “very, very positive to get it done” before he departs for two overseas global summits.

“That’s my hope,” the president said before leaving his home state of Delaware for a trip to New Jersey to highlight the child care proposals in the package and a related infrastructure measure. “With the grace of God and the goodwill of the neighbors.”

Resolving the revenue side is key as the Democrats scale back what had been a $3.5 trillion plan, insisting all the new spending will be fully paid for and not pile onto the debt. Biden vows any new taxes would hit only the wealthy, those earning more than $400,000 a year, or $450,000 for couples.

The White House had to rethink its tax strategy after one key Democrat, Senator Kyrsten Sinema, objected to her party’s initial proposal to raise tax rates on wealthy Americans by undoing the Trump-era tax cuts on those earning beyond $400,000. Sinema also opposed lifting the 21 percent corporate tax rate. With a 50-50 Senate, Biden has no votes to spare in his party.

Instead, to win over Sinema and others, the White House has been floating a new idea of taxing the assets of billionaires and another that would require corporations to pay a 15 percent minimum tax, regardless of if they show any profits. Those both appear to be gaining traction with another pivotal Democrat, Senator Joe Manchin.

Once Democrats agree to the tax proposals, they can assess how much is funding available for Biden’s overall package to expand health care, child care and other climate change programs.

Democrats were hoping Biden could cite major accomplishments to world leaders later this week. They are also facing an October 31 deadline to pass a related $1 trillion bipartisan infrastructure package of roads, broadband and other public works before routine federal transportation funds expire.

“We need to get this done,” Biden said in remarks at a New Jersey transit center.

Biden huddled with the conservative West Virginia Democrat Manchin and Senate Majority Leader Chuck Schumer at the president’s Delaware home on Sunday as they work on resolving the disputes between centrists and progressives that have stalled the bill. A person who requested anonymity to discuss Manchin’s position told the AP the senator is agreeable to the White House’s new approach on the tax proposals.

Picking up a populist theme sounded during the presidential campaign, Biden is pushing to have corporations and the wealthy pay a “fair share” and end the practice of some of the wealthiest Americans skipping out on any taxes.

The billionaires’ tax is being modeled on a 2019 bill from Wyden to treat assets as income. Another idea, for a 3 percent ultra-rich surtax, has been proposed by Senator Elizabeth Warren.

Separately, Sinema’s objection to raising corporate tax rates from 21 percent to 26.5 percent, as Democrats had proposed for those firms earning more than $5 million a year, has led the White House to float plans to keep the current 21 percent rate but add a new 15 percent corporate minimum. That would try to end the practice of big companies claiming so many write-offs that they pay little to no tax.

After months of start-and-stop negotiations, Biden’s overall package is now being eyed as at least $1.75 trillion. But it could still climb considerably higher, according to a second person who insisted on anonymity to discuss the private talks.

House Speaker Nancy Pelosi said Sunday on CNN even though it’s less than what was first envisioned, “it’s still bigger than anything we have ever done in terms of addressing the needs of America’s working families.”

Disputes remain over far-reaching investments, including plans to expand Medicare coverage with dental, vision and hearing aid benefits for seniors; child care assistance; and free pre-kindergarten.

Pelosi said that Democrats were still working to keep in provisions for four weeks of paid family leave.

Pelosi said she expected an agreement by week’s end, paving the way for a House vote on the $1 trillion bipartisan infrastructure bill. The Senate had approved that over the summer, but the measure stalled during deliberations on the broader Biden bill.

Work Continues on Spending Plan
While Democratic lawmakers have not yet set the new billionaire’s tax rate meant to help pay for President Joe Biden’s sweeping spending plan, it is expected to be at least 20 percent. Above, Biden participates in a CNN town hall at the Baltimore Center Stage Pearlstone Theater on October 21, 2021, in Baltimore, Maryland.
Evan Vucci/AP Photo

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