President Joe Biden on Monday called to create a “billionaire minimum income tax” that targets the richest households in the United States, The New York Times reports.
Biden’s budget proposal included a new tax on households with a net worth of more than $100 million.
The proposal would require these households to pay at least 20% of their income as taxes as well as unrealized gains that are typically only taxed when they are sold.
The White House estimates that the tax will raise about $360 billion over the next decade and crackdown on tactics used by the wealthy to avoid taxation.
It’s unclear whether the Senate will entertain Biden’s proposal. The White House previously dropped its plan to roll back some of former President Donald Trump’s tax cuts for the wealthy amid opposition from Arizona Sen. Kyrsten Sinema.
WH targets loopholes:
White House officials said the proposal would eliminate loopholes that the wealthy have used for years to lower their tax bills below the rate paid by average Americans.
The tax would only apply to households that do not already pay a 20% rate on their income and unrealized gains.
Those who pay below 20% will have to pay the difference between their tax rate and the 20% rate.
The Biden budget also calls to raise the top tax rate on individuals from 37% to 39.6%.
Biden also called to raise the corporate tax rate from 21% to 28%.
In all, the tax proposals would raise about $2.5 trillion over a decade, the White House says, which will cover the cost of spending increases and deficit reduction.
Conservative groups criticized the proposal on Monday.
“Under Biden’s tax proposal, wealthy people would be rewarded for consumption and penalized for reinvesting to grow their businesses,” said Chris Edwards, director of tax policy studies at the Cato Institute. “Patience and prudence would be punished. The Biden plan would particularly harm leading edge industries that rely on wealthy investors to take the large risks that drive American innovation.”
Retail groups also criticized the corporate tax increase.
“Leading retailers are extremely disappointed to see a tax plan from the president that revives earlier failed plans to raise the corporate tax rate to 28 percent,” said Hana Greenberg, vice president of tax at the Retail Industry Leaders Association. “Practically, this tax increase would disproportionally punish retailers who already pay their full freight in corporate taxes.”