Pres. Biden is considering a billionaire tax to pay for his spending proposal

President Joe Biden has a new plan to pay for his multi-trillion-dollar spending proposal – you know, the one that he claims will cost “zero dollars.” The only problem, though, is that not all Senate Democrats are necessarily on board with it.

That’s because, according to the Daily Mail, Biden wants to include in his spending proposal a tax that would target American billionaires. 

Some specifics

The fine print of Biden’s tax proposal has yet to be released because it is still being worked on by Sen. Ron Wyden (D-OR), the head of the Senate Finance Committee. The Daily Mail reports that Wyden is working in tandem with the White House and the U.S. treasury on this one.

We do, however, have some idea of what the tax proposal would entail. First off, as stated at the outset, it would target America’s ultra-wealthy, namely, those six or seven hundred individuals who have made more than $100 million a year for three consecutive years.

The other thing we know is what would be taxed, that is, these billionaires’ stocks and bonds.

The idea of the tax is to close what some consider to be a tax loophole. Stocks, for example, are only taxed when sold. Yet, wealthy individuals use stocks as collateral for loans, which allows them to pay less – or sometimes even nothing – at tax time. Hence, Biden’s tax.

Problems galore

There are a number of problems with Biden’s tax proposal.

For one, it is unlikely to close up this so-called tax loophole. As critics are already pointing out, if this tax is ever put on the books, billionaires will simply put their money elsewhere. There is no requirement that billionaires put their money into stocks.

Another problem, which has two parts, is that the tax is unlikely to help with Biden’s spending proposal, which, after all, is its main purpose. The first part of the problem is that it appears unlikely that a tax placed on the stocks and bonds of six to seven hundred billionaires would be enough to pay for a spending proposal with a multi-trillion-dollar price tag.

The other part of the problem is that the tax may actually turn some Senate Democrats, such as Sen. Kyrsten Sinema (D-AZ), away from the spending proposal. Sinema, in the past, has made it clear that she is against the “tax the wealthy” proposals that have been suggested by her fellow Democrats, although she has yet to weigh in on this specific proposal. And, with the current makeup of the Senate, Sinema’s vote would be enough to doom the spending proposal.

Background

Congressional Democrats and the Biden administration have been working to come up with a spending bill that both progressive and moderate Democrats can get behind. The effort stalled earlier this month when an impasse was reached between the two groups.

The latest reports would seem to suggest that the Democrats are closing in on a spending proposal that would be around $2 trillion, although it remains to be seen what would be included in it.

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