— part of the administration’s effort to reduce the federal deficit over the next decade and fund new spending. The proposal “eliminates the inefficient sheltering of income for decades or generations,” the White House says.
Whether Congress will approve is a major question as the administration outlines its hope to tax the nation’s highest earners.The budget proposes that households worth more than $100 million pay at least 20% in taxes on both income and “unrealized gains”— the increase in an unsold investment’s value. For many wealthy individuals, the administration says, that “true income” never gets taxed since it can be held onto for decades and sometimes generations.
Biden’s proposal would allow wealthy households to spread some payments on unrealized gains over nine years, and then for five years on new income going forward. Stretching payments over multiple years is meant to smooth yearly variations in investment income, while still ensuring that the wealthiest end up paying a minimum tax rate of 20 percent.
This is an extremely nuanced policy. The tax is targeting the ultra wealthy. It’s taxing gains achieved from their wealth, but it’s real and unrealized income rather than simply the underlying assets. That’s why David Gamage, a tax law professor at Indiana University says “it’s not a wealth tax, it’s an income tax reform.” He says, “This is a minimum income tax that includes the true economic value” of income that can be held for a very long time, he said.Roughly 700 billionaires would be affected by the tax proposal, the White House says, estimating that these individuals increased their wealth in 2021 by $1 trillion, paying roughly 8 percent of their income and unrealized gains in taxes.
DOL reopens rulemaking record on COVID protections in health care pr
Much of additional funds proposed to be collected may have to be plowed back into the IRS to handle audit and litigation of the billionaire tax.
is it me....or does RFK's head look deep fried?
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Let me tell you how it will be There's one for you, nineteen for me
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