Biden to propose minimum tax on billionaires

As part of Biden's 2023 budget proposal, he intends to propose a minimum tax on the income of households worth north of $100 million. This is noteworthy for a few reasons, not least of which is the fact that it targets "all of their income including unrealized investment income that is now untaxed."

The plan would require such households to pay the minimum tax of 20% on all of their income including unrealized investment income that is now untaxed, the fact sheet said.

The tax will help reduce the budget deficit by about $360 billion in the next decade, the fact sheet added.

This appears to be specifically tailored to target the Buy. Borrow, Die tax strategy which utilizes the Stepped Up Basis to avoid the capital gains tax.

There's no chance this passes in the current political climate, but seeing it in a presidential budget indicates it has more traction than I expected.

Thoughts?

Link

Good. They have so many ways to avoid tax and those programs benefit them just as well as the rest of us.

G O O D ! ! !

Imagine how much easier it would be to actually have a first rate country if we properly taxed the people who can actually afford to be taxes. It would be amazing.

I'm curious as to the mechanism for taxation if it targets capital. Does it work by triggering a taxable event? Does it require one? Or will it be treated like property tax, where it's simply due by years end based on a form of self reporting on total assets owned. If it's the latter I'm just running through scenarios in my head where suddenly all of these rich people drop their net worth estimates to avoid taxes.

I'm totally onboard with eliminating step up cost basis. Bullsh*t rule that lets the rich continue being rich generationally. Totally different world where the rich can just take out loans and lines of credit, and claims 'BUT I HAVE NO LIQUID MONYE LOLOLOLOL'. Since loans are non-taxable its a great way to avoid taxes.

Good. Think of all you can do with that revenue.

And really what is the difference between having 10 billinon or 11 billion dollars? It is pragmatically 0. "Oh man I really wish I had 11 billion dollars instead of 10 then I could afford....wait, what?"

Just more nonsense that the right will just reject. How about deregulation, by scaling back patents trademarks, IP etc. That will put more money directly back into our wallets.

been saying this for a few years now.

Stocks are no different from real estate, which has a property tax and you pay it from the market value and no one cares about "unrealized gains". Makes sense to tax stocks the same way as well.

Unlike real estate tax, they won't be able to devalue their stock portfolios - the IRS has access to your data and the stock prices is public information. The only question would be the principal of how the taxable stock price is determined: is it a fixed date/time (the rich could just artificially crash the market on that day to lower their taxes), or an average of some period of time.

Two things, since some of you don't know how politics works. Biden doesn't make, or write the budgets. Biden also knows nobody in congress is going to make that part of a bill. He knows his proposal carries no legal weight, he's talking out his ass because the midterm elections are coming up and some of the lesser intelligent people in this country eat that shit up and convince themselves someone in higher office is on their side.

TL:DR: It ain't happening, or Biden wouldn't have proposed it in the first place.

@eoten: Read the OP again….

Funny how the majority of the right say they hate elitist but where find when Trump gave massive tax cuts to the rich.

Corporate taxes are not taxes on the rich, they're taxes on the consumer, and that is what was mostly cut. Federal income taxes were reduced for everyone. There was no "tax cuts for the rich."

Then you should appreciate this proposal as it is firmly on individuals.

Firstly, the proposal isn't going to happen given about 90% of congress represent special interests. Secondly, I've never seen one of those "tax the rich" bullshit bills harm more than the middle class and small business any way.

I am pretty sure when the middle class was at its strongest when the richest had some of the highest tax rates.

This is acknowledged in to OP. It's noteworthy for it's inclusion in an official proposal from a high leadership position, and thus "moving the football" in that direction.

So you object to taxing the rich because you believe it will harm the middle class?

Corporate taxes are just taxes on the consumer? Oh, then why do corporations get tax bills? Why have Republicans not just made the corporate tax zero then? You should let all these companies know that the tax bills they get from the IRS aren't really taxes on them. Maybe they then wouldn't have to pay them.

That is a silly right-wing talking point and absurd statement. Of course corporate taxes are NOT taxes on consumers. Sales taxes are taxes on consumers. Corporate taxes are taxes on corporate net profit. How does a corporation know how much of this tax to pass on to consumers when they have no idea what their sales and thus final tax bill will actually be? What if a corporation has a net profit of zero and has no tax liability? How could a consumer have paid a corporate tax that wasn't levied in the first place?

Your replies are way too simple minded.

Oh, and those tax cuts in 2017 are already expiring for the middle class, but were made permanent for corporations, which according to you, don't pay taxes anyway. Funny how that works.

Yeah? You're pretty sure? Based on what?

1950's

Granted, there were a lot of ways they could reduce that tax rate, but it was still significantly higher than it is today.

Yeah, you people like to point at the 1950s as an example without actually understanding it. Tell me, what did the "1%" pay in income taxes in the 1950s?

The average was around 50% in effective taxes.

42% to be more accurate. Which is only a couple percentage points higher than what you people are claiming are "tax cuts to the rich" post 2017. It's pretty safe to say this has very, very little to do with the middle class, and doesn't make a comparison between the 50s, and today a good one.

Curious where you got this crap from though, I doubt you've ever paid income taxes in the United States.

Which is around 15% higher than they pay now. Don't underestimate an extra 15% revenue.

Not to mention once you get to the 0.1% and the likes. Who likely are the billionaires this thread concerns itself with.

It can move some discussion towards the idea but I agree with you in that it has no chance at passing.

Current top income tax bracket is 37%. 42% was the effective income tax bracket then. That's 5% difference, not 15%.

You're comparing the top marginal income rate now to the effective income rate then, neither of which is captured in what's discussed in this proposal.

@mattbbpl You are right. We should look at this specific policy instead of generalities. I apologize.

What is 42/36.4?

Effective now is way lower, isn't it?

Funny, I don't remember a reduction in durable goods/services when the corporate income tax was reduced. Surely that would have been passed onto the consumers.

Where did it go?

Raise it higher and tax their assets as well.

@mattbbpl said:

@horgen said:

Effective now is way lower, isn't it?

Where is this from?

I wanna read more. Because wow, it looks like think tanks I got my info from might have been misleading me.

@Maroxad said:

@mattbbpl said:

@horgen said:

Effective now is way lower, isn't it?

Where is this from?

I wanna read more. Because wow, it looks like think tanks I got my info from might have been misleading me.

https://www.brookings.edu/wp-content/uploads/2019/09/Saez-Zucman_conference-draft.pdf

@Maroxad: Its from here, page 20: link

It's almost like it might have been passed directly to shareholders!

Are you telling me that increased profits from a tax cut would be passed on to investors by an entity that's ethos is to maximize shareholder wealth? I'm shocked! Shocked, I say!

It's hard to hear the same old story, over and over again. Too high corporate taxes are going to stagnate growth, passed onto the consumer via prices. But when we provide these tax cuts it's always used for the same old bullsh*t. Stock buy backs or executive payouts. At least with higher corporate tax rates it provides incentives to reinvest into your company. Most people are unaware that it's a tax on profits only, so things like operational costs, labor, etc., are excluded.

Wouldn't it be lovely if the average person rec'd such treatment? You could reduce your taxable income by subtracting your bills!

When I posted on this a few months ago you claimed it wasn't important or meaningful in its impact on tax revenues. Once again, your mindless drivel comes back to haunt you. I highlighted the irony for you.

Thank you, and I retract my original estimate.

Well... this is why Google can be a dangerous thing. The results I got were the top results. Should have used Google Scholar instead. I usually forget it also has economics and not just the hard sciences.

Someone should tax the poor for being poor to make it fair. Oh wait, that's what tobacco and the lottery is for!

What are you talking about? You can easily look up a chart of the collected tax revenue per year and see it shows no noticeable difference per year than prior. You listened to WaPo and NYT calling it a "9 trillion dollar tax cut" based on their predictions which were not based on sound data, nor presented honestly, and those predictions have clearly not come to fruition. Secondly, we just passed yet another spending bill of how many trillions of dollars? And you still think this is a problem with collected tax revenue, and not one of out of control spending? How much do YOU pay in taxes? Do you even pay taxes? Last year more than half the households did not pay federal income tax.

Maybe you people who think we need more funding for this program, more money for those people should step up and pay your fair share?

The latter is exactly the problem. True to form, those perpetuating the issue shift the blame on others. As an example exposing the folly of our "leaders" remember a few weeks back when they wanted to haul the oil company big wigs in front of Congress to find out about high fuel prices? How come they never mention the ridiculous federal gas tax and the impact it has on fuel prices? Why is it always the fault of someone else rather than Congress? Politicians never over-spend or waste OUR money. Rather, it is someone else not paying enough and quite honestly, it seems as if that is acceptable as long as it isn't the rich.....according to some.

You asked about paying taxes. How many kids do you think opine on these topics?

The tax hasn't changed. The corporate pricing has.

More interesting would be a plan to curtail government spending, especially with current inflation considered. You don’t increase your kid’s allowance if they struggle to spend their money wisely and don’t have enough for all the other stuff they want to buy.

Maybe some parts are run poorly due to lack of funding?

When they cut money, it's always for those in need and not any of the freebies handed out to the wealthy, corporations, vanity projects, military spending, and for friends.

Hey, gotta pay back those bribes, right?

Unfortunately. We really need money out of politics.