Biden Proposes New Tax on Multi- Millionaires

For starter, billionaires and multi-millionaires would see an end to many of the legal loopholes they have been exploiting for generations. For example, the proposal would count the appreciation in the value of a billionaire’s investment as income even if the assets aren’t sold. In simpler terms, if a billionaire holds a large number of stocks in one company but hasn't sold any of them recently, then he/she previously wouldn't have had to pay any taxes on those earnings. However, under Biden's new proposal, he/she would have to pay those taxes along with capital gains taxes when selling the stocks.

In addition to that, there would also be a general raising of capital gains taxes. Back in October, Democrats in Congress tried something similar by proposing a 3.8% raise on the rates of the wealthiest capital gains taxpayers, although that measure failed. So, for Biden's new proposal, he may scale that number down to make the deal more appealing to Republicans, although we do not know all the details on that yet.

It is well known that many wealthy Americans do not pay their fair share of taxes in the first place. According to the US Treasury, the top 1% of taxpayers, ranked by income, failed to pay about $163 billion in taxes last year, amassing 28% of Americans' total unpaid taxes. Billionaires account for the majority of tax evasion cases because the wealthiest Americans have the financial resources to “tap into the services of accountants and tax preparers who help shield them from bearing their true income tax liability,” a spokesperson from the US Treasury said in September.

Biden's proposal would put a complete end to that and other forms of billionaire tax evasion. The White House says that "billionaires paying a tax rate below 20% of their income and unrealized gains would have to pay additional taxes to make up the difference, while those already paying more than 20% would not owe additional taxes."

As for the rest of us, this new tax proposal could mean a lot of things. Primarily, it means that there will be more money in the federal budget to spend on the general public. According to the plan, the tax would raise an estimated $361 billion for the federal budget over the next decade, with more than half the revenue coming from billionaires alone. Biden then noted that most of the money will be going to building public projects like schools, hospitals, police stations, fire stations, and more.

It also works to raise public morale. Most people have long been arguing that the rich need to pay their proper share of taxes in order to maintain an unequal but fair balance of wealth. This new code will adhere to those demands and more.