❗Let's close the gap: We still need your help to raise $40,000 by April 1. Donate now

Biden proposes minimum 20% tax on wealthiest American households

Matt Levin Mar 29, 2022
Heard on:
HTML EMBED:
COPY
Nicholas Kamm/AFP via Getty Images

Biden proposes minimum 20% tax on wealthiest American households

Matt Levin Mar 29, 2022
Heard on:
Nicholas Kamm/AFP via Getty Images
HTML EMBED:
COPY

The White House budget proposal includes new spending on things like affordable housing and national security. So, who’s going to pay for all that? Well, if it’s up to President Joe Biden, hopefully the wealthiest Americans will be chipping in more than in years past. 

Biden is calling for a “billionaire minimum income tax” — at least a 20% tax on the very richest households in the country.

The White House estimates that the wealthiest 400 households in the U.S. pay 8.2% in federal income taxes. 

“Some of our most fabulously wealthy Americans have amassed fortunes that have gone untaxed during their lifetime,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center.

The Biden plan tries to get a slice of those fortunes by taxing unrealized capital gains, mostly stocks that have shot up in value. 

Now, the government only gets a cut when someone like Elon Musk sells Tesla stock.

“The Biden administration thinks they can collect hundreds of billions of dollars,” Rosenthal said, adding that the proposal would affect about 20,000 households that have more than $100 million in net worth.

But those households are good at avoiding tax hits, said Will McBride, vice president of federal tax and economic policy at the Tax Foundation. 

“This will create basically a cottage industry of tax planning around the tax,” he said.

You know that line from Jurassic Park, “life finds a way”? The same goes for tax avoidance. 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.