The Joe Biden administration will propose increasing the tax burden on the wealthiest Americans in its 2023 budget proposal, which is scheduled to be released on Monday, the Washington Post reported on Saturday .
The proposal, called the “Billionaires’ Minimum Income Tax,” seeks to set a minimum tax rate of 20 percent on annual income of more than $100 million.
“The multi-million dollar minimum tax will ensure that the wealthiest Americans pay at least 20 percent in taxes on their entire income,” says the White House text obtained by the newspaper.
The introduction of the minimum tax on the richest Americans represents a major reorientation of the tax code. It would apply to the richest 0.01 percent of households, with half of the expected revenue expected to come from households with $1 billion or more.
The new measure, which must be approved by Congress before it can be applied, plans to raise nearly 360 billion dollars in 10 years.
If the Biden administration’s proposal is approved, Elon Musk, the head of Tesla and the richest man in the world, will have to pay 50 billion dollars more in taxes and the founder of Amazon, Jeff Bezos, about 35 billion more, according to calculations by Gabriel Zucman, an economist at the University of California at Berkeley, cited by the newspaper.
An earlier study by the Biden administration this fall claimed that 400 billionaire households paid an average of 8.2 percent in taxes on their income between 2010 and 2018, a rate often far lower than many American households.
The minimum tax will effectively prevent the most affluent in the United States from paying lower rates than those of families that are considered middle class, while helping to generate revenue to finance Biden’s internal programs and relatively contain the deficit in the economy.
That deficit spending fueled an economic expansion at a 5.7 percent pace last year, the strongest since 1984. But the highest inflation in 40 years also accompanied those strong gains as rising prices have affected Biden’s popularity.
According to the Biden administration, the proposal for the fiscal year that begins Oct. 1 shows that strong spending has helped boost growth and put the government’s finances on a more stable footing for years to come.
The dissipation of the pandemic and growth have allowed the deficit to fall from 3.1 trillion dollars in fiscal year 2020 to 2.8 trillion last year and 1.4 trillion as projected for this year.
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