A bill put forward by two House Democrats aims to advance President Joe Biden’s proposal to reduce wealth inequality by getting the richest Americans to pay taxes on unrealized gains, according to news reports.
The billionaires’ minimum income tax bill, proposed by U.S. Representatives Don Beyer, D-Virginia, and Steve Cohen, D-Tennessee, would require individuals worth more than $100 million to pay a minimum 20% on their capital gains regardless of whether the assets were sold or not, Bloomberg writes, citing a copy of the legislation that it obtained.
Capital gains taxes are currently paid only on realized gains.
A summary of the bill points to billionaires including Jeff Bezos, Elon Musk and George Soros being able to eschew taxes altogether by borrowing against their wealth instead of realizing gains, according to the news service.
“While working families pay taxes on each and every paycheck or pension payment, the ultrawealthy can make hundreds of millions of tax-free dollars a year,” Cohen said in a statement cited by Bloomberg. “Instead of all their billions going to buying super yachts, rocket ships, professional sports teams, and Twitter, it is time that billionaires chip in like everyone else to pay at least a base level of taxes.”
The news service adds that a “quirk” of the proposal would mean that rich Americans wouldn’t owe capital gains taxes in bear markets.
The bill would affect just 0.01% of U.S. households, but it’s not likely to pass the U.S. Congress regardless, Bloomberg writes.
The bill isn’t part of the tax and climate deal the Democrats reached with the recalcitrant Sen. Joe Manchin, D-West Virginia, announced on Wednesday, according to the news service.
Americans on the Bloomberg Billionaires Index grew their collective net worth by $1.2 trillion in 2020 and 2021 but then saw it shrink by around 15.2% year to date, Bloomberg writes.
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