West Virginia Democrat Senator Joe Manchin, on Tuesday, decried President Biden’s new proposal to raise $360 billion in annual revenue by imposing a 20% minimum tax on billionaires.
This is a plan the president officially revealed Monday in his budget proposal to Congress.
Democrat Joe Manchin says he opposes Biden’s idea to tax the unrealized profits of billionaires.
This would create a new precedent by taxing the value an asset accumulates in theory, before it has been sold and transformed into cash.
Sen. Joe Manchin shoots down Biden's latest idea of 20 percent minimum tax on billionaires that would tax income & unrealized gains.
"You can't tax something that's not earned — earned income is what we're based on," he says. "Unrealized gains is not the way to do it."
— Alex Bolton (@alexanderbolton) March 29, 2022
Manchin’s Thoughts on Biden’s Bill
As a result of Manchin’s resistance, Biden’s plan is likely to be shelved barely a day after it was revealed by the White House.
It may be drastically altered in order to avoid paying unrealized profits; this would provide a considerable difficulty in terms of attempting to make up for the money that would be lost.
Since many of the nation’s wealthiest people, including Amazon CEO Jeff Bezos and Tesla founder Elon Musk, have been able to pay little or no income tax in the past by not disclosing their income, taxing just the steady income of billionaires has proven problematic.
Instead, to fund their extravagant lives, the ultra-rich often obtain funding secured by the worth of their possessions.
Guess who’s against President Biden’s 20% minimum tax on billionaires? Surprise!! Joe Manchin.
— 888 Good Troubles (@LebergerDavid) March 30, 2022
“I’ll tell you what they do. They make an appointment with their accountant. They instruct their accountant to ‘make certain [they] do not get any revenue or pay.'”
“In fact, nobody knew anything about it a few years ago, but now everyone is fairly well aware of it,” said Senator Ron Wyden (D-OR), chairman of the Senate Finance Committee.
He recently introduced his own plan to tax the unrealized profits of billionaires.
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According to Wyden, putting a minimum 20% tax on billionaires is necessary to ensure they pay a tax rate comparable to middle-class Americans.
He praised President Biden’s idea as “solid.” Because the value of assets may change, determining how to structure a tax on unrealized capital gains is difficult.
According to Senate GOP Whip John Thune, a member of the Finance Committee, “the difficulty with that specific tax is it is a tax on unrealized profits.”
According to him, “It’s essentially taxing people before they actually receive the income. That appears to be a really dangerous precedent in tax law. If you have an enormous gain one year and a huge loss in the next, how is the government going to compensate people for their losses?” he asked.
In addition, “we’ve always had a concept in our tax policy that a gain or income must be really realized before it can be taxed; this utterly violates that notion,” he said.
“The tax is merely a wealth tax, but I believe that it sets a hazardous precedent.”