President Joe Biden described the U.S. tax system as “not fair” and called for Congress to pass a “billionaire minimum tax,” in the State of the Union Tuesday.
Funding for climate change initiatives would come from “finally making the wealthiest and biggest corporations begin to pay their fair share,” Biden said. The president touted signing the Inflation Reduction Act — which set a 15% minimum corporate tax rate — before calling on Congress to “finish the job,” and pass his “billionaire minimum tax.”
“We have to reward work, not just wealth,” Biden said. “Pass my proposal for a billionaire minimum tax. Y’know there’s a thousand billionaires in America, it’s up from about 600 at the beginning of my term, but no billionaire should pay a lower tax rate than a school teacher or a firefighter.”
The president had previously pushed for a 20% minimum tax on “total income” earned by billionaires to be included in the 2023 budget, but the plan stalled in Congress, according to CNBC. The plan, which would have included unrealized gains such as capital gains and investment growth in a billionaire’s “total income,” is now even less likely to pass given Republican control of the House.
A similar attempt at a billionaire tax in October 2021, proposed by Senate Democrats, failed to garner support from fellow Democrats, according to CNBC. Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, told CNBC that Biden’s plan could potentially face “very complicated” legal issues, and that he was “quite skeptical” of it.
Biden also claimed that Americans earning less than $400,000 per year would not “pay an additional penny in taxes,” at the State of The Union Tuesday. Taxes are set to go up under the Inflation Reduction Act, and that the tax rate for those making less than $10,000 would climb to 7.6% in 2023 from 7.3% in 2022, according to The Congressional Joint Committee on Taxation (JCT) in July 2022.
The White House has previously pushed back on the JCT report, with press secretary Karine Jean-Pierre claiming that the report was “incomplete” since it failed to consider “benefits that Americans would receive” under the bill.
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