The Biden administration is planning to unveil a new minimum 20 per cent income tax on the the wealthiest Americans.
Dubbed the “Billionaire Minimum Income Tax”, the proposal would target American households worth more than $100m and if passed would generate about $36bn in extra tax revenue each year.
“This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters,” a White House document, first reported by the Washington Post, says.
President Joe Biden has spoken repeatedly about his desire to raise taxes on the rich to pay for social spending plans.
However, previous plans to pass tax billionaires have been blocked by Senators Joe Manchin and Kyrsten Sinema.
The proposed levy, to be announced by the White House on Monday as part of its 2023 budget, would force the 700 richest American households to make a “top-up payment” if they pay less than 20 per cent on their full income.
This would include unrealised gains on assets like stocks.
“As a result, this new minimum tax will eliminate the ability for the unrealised income of ultra-high-net-worth households to go untaxed for decades or generations,” the document stated.
Gabriel Zucman, an economist at the University of California Berkeley, told the Washington Post the Tesla chief executive Elon Musk would pay an extra $50bn per year under the plan.
Jeff Bezos, the founder of Amazon, would have to pay an additional $35bn, according to calculations by Mr Zucman.
Sen Manchin has previously sent mixed signals on whether he would support a new tax on billionaires.
In October, a source close to the West Virginia Democrat said he was “agreeable” to the proposal.
Days later, he pushed back on the plan, calling it “divisive”.
