Democratic Party representatives in the United States Senate have unveiled plans for a tax on billionaires that will help fund a new economic policy agenda under the Biden administration, despite stiff opposition from within their own party.
The new tax code will put higher taxes on incomes of over $100 million per year or those gaining over $1 billion in assets. Other features of the tax code also include a 15% minimum tax on corporations. The money then raised will go towards social services and fighting the climate emergency. Under these proposals, only 800 Americans would be affected by higher taxes.
The corporation tax level is much lower than what had been initially planned, but a higher rate on corporations and a complete reversal of the Trump tax cuts, was blocked by one of the Democrats own members, Sen. Kyrsten Sinema of Arizona. She isn't the only Democrat politician to undermine the President and oppose the tax rises. Senator Steven Mnuchin said of the so-called 'billionaire's tax':
"I'm generally in favor of simplifying the tax system and making sure the appropriate taxes are collected. But when you talk about targeting one segment of the population in a very specific way, I worry about the unintended consequences."
He continued:
"My guess is a lot of these fortunes will be transferred to foundations and charities. I guess you'll accelerate that process, so you probably won't collect as much revenue, but we'll see. So no, I don't support any tax increases."
In total, Biden wishes to raise $1.75 trillion for healthcare, childcare and the climate. This is down from the earlier plans of $3.5 trillion.
Many have however suggested that the plans do not go far enough, and no individual earning under $400,000 will have their taxes raised in any way.
Rep. Richard Neal, a Democrat from Massachusetts, has himself proposed that tax on those earning over $400,000 should be increased significantly and that corporation tax should go as high as 26%.
It is widely believed that governments across the world will increase taxes in the short term to pay for the huge debts created by the pandemic and as a way of tackling the climate emergency.
[Based on reposting by: Reuters]
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