U.S. President Joe Biden is planning to propose a new minimum tax that would largely target billionaires when he unveils his 2023 budget, according to multiple media reports.
Called the “Billionaire Minimum Income Tax,” it would assess a 20% minimum tax rate on U.S. households worth more than $100 million U.S. Over half the revenue generated from the new tax would come from people worth more than $1 billion U.S.
The proposed levy is expected to reduce the U.S. deficit by about $360 billion U.S. in the next decade. If a wealthy household is already paying 20% on their full income, they won’t pay an additional tax under the proposal. If they pay less than 20%, they’ll owe a “top-up payment” to meet the new minimum.
The new tax proposal is part of President Biden’s 2023 budget expected to be released later today (March 28). His new spending plan would trim $1.3 trillion U.S. from the deficit over the next decade, according to documents released by the White House over the weekend.
What remains to be seen is whether Congress will move forward on Biden’s proposal. Last year, Senate Democrats unveiled a billionaires’ tax, which would have levied the unrealized capital gains of the wealthiest Americans. The measure ultimately did not proceed.
In fiscal year 2021, the federal deficit totaled nearly $2.8 trillion U.S. — about $360 billion U.S. less than in 2020, according to the Congressional Budget Office.
