President Biden announced that he would support a proposal to tax billionaires for appreciation on their investments. The proposal, put forward by Senate Finance Committee Chairman Ron Wyden, is a novel and controversial way of preventing the ultra-rich from avoiding hefty tax bills. â
Biden emphasized that the bill wasn’t specifically intended to bolster the administration’s new $3.5 trillion ‘infrastructure’ bill, but to send a message to billionaires telling them to “pay [their] fair share.”
The proposal has not been added to the House tax plan, but it already faces political challenges from moderate Democrats like Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), who would join nearly every Republican in opposition.
Taxing billionaires on unrealized gains is aspirational for left-leaning Democrats considering the rapid increase of wealth that billionaires have enjoyed during the pandemic. However, detractors say that the proposal (which is known as “mark-to-market“) would be unnecessarily difficult to track and report.
The plan is one among many other controversial amendments to the tax code. Among the most imaginative are amendments to the estate-tax, raising capital gains taxes, and a plan to raise the corporate tax rate back to a higher level (it was lowered during the Trump administration).Â
All things considered, it’s likely we’ll see changes to the tax code. Maybe they could start by funneling some of that cash into some resources for IRS customer support? ð