Understanding Biden's proposal to tax billionaires' unrealized gains
According to the White House, billionaires in America pay income tax at a rate that’s just half that of the average worker. Some billionaires pay no tax at all.
So, President Biden is proposing taxing the unrealized gains of the richest Americans — taxing assets the wealthy haven’t yet cashed out on.
It’s a big idea that’s getting even bigger pushback.
“If there’s no sale, there’s no cash to pay the tax typically,” says Steve Rosenthal, senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute.
Except that sometimes, the wealthy can borrow against those assets and get even wealthier.
“There’s no sales tax at the federal level for the billionaires who spend a lot of money on yachts and mansions. We only collect taxes on income,” Rosenthal says. “And so, the question then is what is income? And should unrealized gains be treated as income?”
Today, On Point: Wealth, taxation, and the Biden Administration targeting unrealized gains.
Steve Rosenthal, senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute. (@stevertax)
Jesse Eisinger, senior editor and reporter at ProPublica. (@eisingerj)
Alex Hendrie, tax policy director at Americans for Tax Reform.
Jack Beatty, On Point news analyst. (@JackBeattyNPR)
Morris Pearl, chairman of the Patriotic Millionaires. Former managing director at BlackRock, one of the largest investment firms in the world. (@morris_pearl)
Tax Policy Center: “Biden’s New Taxes for Billionaires: One Is Hard, One Is Easy” — “This week, President Biden proposed two new taxes on the very rich. A minimum income tax that Biden calls a billionaire tax but would in reality apply to households with a net worth of $100 million or more. And a separate tax at death on gains from appreciated assets, even if the assets are not sold.”
This article was originally published on WBUR.org.
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