Washington. Democrats in the US Senate on Wednesday proposed imposing a tax on billionaires, an unprecedented idea that seeks to facilitate consensus among party factions and win approval for President Joe Biden’s ambitious reform plan.
Later, however, top Democratic lawmakers opposed a proposal to tax billionaire assets to help pay for climate change and Biden’s social agenda, making it unclear whether the idea had enough support to become law.
The so-called billionaire tax, announced by Senate Finance Committee Chairman Ron Wyden, is part of a dual legislative strategy that also includes a proposal for a minimum tax of 15 percent on the most profitable US corporations, unveiled on Tuesday.
Wyden and other lawmakers, including Democratic Senator Elizabeth Warren, argue that the legislation aims to reduce tax evasion by corporations and the wealthy and could generate hundreds of billions of dollars to pay for Biden’s climate and social plans, which they are expected to do. They cost between $1.5 trillion and $2 trillion.
According to the statement, the billionaire tax, which will take effect in fiscal year 2022, will affect about 700 taxpayers with more than $1 billion in assets or $100 million in annual income for three consecutive years.
Attendees said it would impose a 23.8 percent tax rate on long-term capital gains on marketable assets, such as stocks, that increase in value over the course of the year, whether or not they are sold. It will also allow taxpayers to deduct losses in the value of assets.
In the afternoon, the chairman of the House Ways and Means Committee, Richard Neal, said the plan seemed too complex to be successful.
Neil, along with other Democrats, supported Biden’s original proposal, which would raise tax rates for corporations and the wealthy, but that idea faces an uphill battle in the Senate.
On the billionaire tax, Neil said: “It will be very difficult because of its complexity.”
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