The White House on March 28 released its 2023 budget proposal, which includes a new tax on billionaires, targeting the wealthiest 700 U.S. taxpayers.
“The Billionaire Minimum Income Tax will ensure that the very wealthiest Americans pay a tax rate of at least 20 percent on their full income, including unrealized appreciation,” according to a White House fact sheet. “This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.”
The Biden administration’s budget blueprint, which is nonbinding, is estimated to add an additional $360 billion in revenue over 10 years, according to the White House. The tax will apply only to the top one-one hundredth of one percent (0.01%) of U.S. taxpayers (those with assets of over $100 million). Over half of the revenue will come from households worth more than $1 billion.
Senate Finance Committee Chairman Ron Wyden, D-OR, in 2021 unveiled a “billionaire income tax” that would have taxed on an annual basis the gains in value of stocks and other unrealized assets. In a statement following the administration’s budget release, Wyden said: “President Biden has put forward a solid proposal that would ensure billionaires pay taxes every year, just like my Billionaires Income Tax. While there are differences between the president’s proposal and the Billionaires Income Tax, we’re rowing in the same direction.”
In addition to the billionaire tax, the budget also outlines the following proposals:
- Raise corporate tax rate to 28% from 21%. The Tax Cuts and Jobs Act cut the corporate tax rate to 21% from 35%, effective January 1, 2018.
- Provide IRS $14.1 billion, $2.2 billion (18%) above 2021 enacted level. This includes $798 million toward improving taxpayer experience and customer service and $310 million for digital modernization of systems.
- Prevent multinational corporations from using tax havens. The budget cites 130 countries that agreed in 2021 to a global minimum tax but argues that large companies operating in the U.S. “undercut the global minimum” through tax havens.
- $50 billion in mandatory and additional Low-Income Housing Tax Credits (LIHTC). The LIHTC would also be modified to incentivize new housing developments, costing an estimated $10 billion over 10 years.
- Provide $1.2 to the Environmental Protection Agency’s Superfund program. According to the budget, this would allow the EPA to “begin to adjust for revenue” from the new Superfund Excise Tax enacted in the Investment and Jobs Act of November 2021 to fund chemical cleanup projects.
“Congress should embrace this agenda this year,” Sharon Parrott, president of the Center on Budget and Policy Priorities, said in a Twitter post. “The first order of business should be enacting economic legislation that … begins to create a more adequate [and] fairer tax system.”
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