Biden to revive plan to tax billionaires in State of the Union

President Biden will resurrect his plan for a so-called “billionaire’s tax” during his second State of the Union address on Tuesday night.

Biden first proposed a minimum tax on the super-rich in March 2022 but it was removed during final negotiations over the so-called Inflation Reduction Act between Democratic Sens. Chuck Schumer of New York and Joe Manchin of West Virginia after Republicans characterized the proposal as a tax hike on middle-class Americans.

The White House included the billionaire tax program in a fact sheet of economic initiatives Biden will discuss in the annual address to Congress.

“President Biden is a capitalist and believes that anyone should be able to become a millionaire or a billionaire. He also believes that it is wrong for America to have a tax code that results in America’s wealthiest households paying a lower tax rate than working families,” the administration said, claiming that billionaires pay an average tax rate of 8%.

That figure is disputed, however, since it is based on a calculation of rates that counts unrealized capital gains as income — which is not the case under current federal law.

A 2019 study by two economists at the University of California, Berkeley estimated that the 400 wealthiest households in America paid an average tax rate of about 23% the previous year. Internal Revenue Service data from 2020, the most recent year for which records are available, showed the top 1% of taxpayers paid 42.3% of federal income taxes, according to the Tax Foundation.

The same analysis found that the top 5% of earners paid 62.7% of federal income taxes in 2020, while the top 10% paid 73.7% of all income taxes.

Brian Deese, the outgoing director of the National Economic Council, told reporters at the White House on Monday that Biden “wants this economic conversation to focus on how we can keep reducing costs for the American people.  

“And doing things like cutting taxes for the very wealthiest people in the country and increasing the deficit as a result of that not only are bad economic policy, but they don’t speak in any way to that core issue,” Deese told reporters.

According to the proposal rolled out in March 2022, households worth more than $100 million would pay at least 20% in taxes on both income and “unrealized gains” — the increase in an unsold investment’s value.

The White House said the new tax plan would apply only to 0.01% of American households.

With Post wires