(Bloomberg) — President Joe Biden on Monday called on Congress to step in to overhaul the tax code and squeeze more revenue from the biggest companies and wealthiest families in a renewed effort.
The Treasury Department released a so-called greenbook that details a plan for $2.5 trillion in tax increases on corporations and high-income households, including a revised wealth tax and the elimination of interest tax breaks for investment funds. This is on top of the $1.5 trillion tax increase included in the house-passed version of Biden’s Build Back Better plan that was not detailed in this document. That bill is stuck in the Senate.
Senator Joe Manchin, a West Virginia Democrat, said he didn’t support Biden’s billionaire tax plan — and his lack of a vote means it won’t become law. “Things you don’t have can’t be taxed on you,” he said on Monday evening. “You can have it on paper. There are other ways for people to pay their fair share, and I think everyone should pay.”
The Greenbook report accompanies the White House’s $5.8 trillion 2023 budget request, also released Monday. This effectively serves as the revenue side of the ledger against Biden’s spending priorities in the budget. The document covers a number of tax considerations — including raising tax rates on capital gains income, corporate gains and personal income — that have already been abandoned in Congress due to a lack of consensus.
The document serves as a wish list for Biden’s tax priorities and will likely be greatly revised as Democrats in Congress begin to shape a social spending and tax bill that would meet the needs of two lawmakers who would never -Sometimes there are different priorities: Arizona’s Manchin and Kirsten Cinemas.
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The Treasury Department said in a statement, the budget’s planned investments “have been fully paid for by paying their fair share to corporations and the wealthiest Americans through tax code reforms, closing loopholes and improving tax administration.” “
One of Biden’s most innovative ideas is proposing a minimum tax on mega-millionaires and billionaires with their unrealized gains. The concept has been popular in progressive circles for years, but Biden stayed away from it during the presidential campaign and during his first year. The proposal will raise an estimated $360 billion over a decade from some of the nation’s 20,000 wealthiest households.
Biden’s billionaire tax faces a tough road in Congress, where House Democrats had already rejected a proposal that included a similar proposal in their version of the Build Back Better plan, which fell through last time.
The billionaire tax is a significant blunder among liberal Democrats and progressives, who are pushing for a drastic change in the tax code so that the wealthiest Americans pay significantly more. Senate Finance Committee Chairman Ron Wyden has been advocating for a series of related proposals for years.
“There is no way to fix our broken tax code without addressing the problem of billionaires evading taxes for decades, if not indefinitely,” Wieden said in a statement. “While there are differences of opinion between the president’s proposal and the billionaire’s income tax, we are rowing in the same direction.”
House Ways and Means Speaker Richard Neill, who leads tax policy for that chamber, has yet to weigh the tax. He issued a statement supporting Biden’s budget, but did not mention the billionaire tax. A spokesman for Neil, a Massachusetts Democrat, did not respond to a request for comment on his position on the tax on unrealized gains.
Biden’s Treasury appointees are talking with lawmakers on Capitol Hill about how to win support for the billionaire tax proposal, a Treasury official told reporters on Monday. The official said the scheme includes some features that address concerns related to earlier proposals on how to tax property similar to work.
Read more: Biden proposes 20% tax aimed at billionaires, unrealistic gains
Munchkin and Cinema, whose votes are crucial to any partisan Democratic bill in the Senate, have rejected many of Biden’s previous tax proposals. Manchin has said he wants to reverse President Donald Trump’s tax cuts and supports higher taxes on the wealthy. However, he criticized earlier versions of Biden’s billionaire tax, saying they are overly complicated.
Cinema has also rejected any increase in the existing tax rates, which include a 21% corporate levy and a 37% top bracket for individuals. This puts him out of step with most other members of his party who support raising rates on big businesses and wealthy taxpayers as a way to fund greater social spending.
The wealth of American billionaires has skyrocketed during the pandemic. According to the Bloomberg Billionaires Index, more than $5 trillion of Americans own at least $1 billion. The wealth of this particular group – more than 800 US billionaires are tracked by the index – have risen by $1.56 trillion since the beginning of 2020, even after losing $169 billion so far in 2022. The vast majority of that growth is in the form of unrealized gains.
Biden’s proposal includes a number of proposals related to digital assets, one of which would require crypto exchanges and other brokers to disclose information about foreigners who invest in the US through passive entities, such as partnerships. . The Treasury said it would allow the US to obtain mutual information on its citizens through data-sharing agreements with other countries.
The department also proposed a change that would allow cryptocurrency dealers or traders to elect to recognize profit and loss on their crypto holdings every year rather than selling assets.
–With assistance from Ben Steverman and Steven T. Dennis.
