Democrats consider billionaire tax

Senate Democrats are at a standstill over how to fund President Joe Biden’s 10-year social spending package. Biden’s original plan raised the corporate tax and taxes on individuals earning more than $400,000 per year, but key Democrats such as Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia opposed those changes. The Senate Finance Committee is working on alternative tax plans to pay for the $1.75 trillion proposal. One idea would tax billionaires’ public assets and require a minimum 15 percent tax on corporations with more than $1 billion in income.

How would this tax work? The billionaire tax would affect fewer than 1,000 Americans. More than half of its expected $200 billion revenue would come from the top 10 wealthiest Americans, including Jeffrey Bezos, Elon Musk, and Bill Gates. According to Bloomberg’s Billionaires Index, the 10 richest Americans own a collective $1.3 trillion, and the top five billionaires saw their personal wealth increase by about 80 percent during the pandemic. Republicans worry billionaires could move their assets to avoid taxation, and legal scholars say the Supreme Court might declare such a tax unconstitutional.

Dig deeper: Read Esther Eaton’s report in the Stew about Biden’s idea to raise revenue by cracking down on tax evaders.