Biden to propose new 'billionaires tax'

Washington: The administration of US President Joe Biden is set to announce a proposal to impose higher taxes on the wealthiest Americans, several US media outlets reported Sunday.

It would be part of the 2023 budget proposal, expected to be released on Monday, according to a White House document cited by The Washington Post.

The so-called "Billionaire Minimum Income Tax" proposal would impose a minimum tax of 20% on households worth more than $100 million (€91 million) and work toward cutting projected budget deficits by more than $1 trillion over the next decade, according to the document.

"This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters," the document said.

Signifying a massive reorientation of the US tax code, the proposal would impact the top 0.01% of households. In this category, half of the expected revenue would come from households worth $1 billion or more.

The proposal would keep the wealthiest people in the US from paying lower rates than those who think of themselves as middle class. Notably, a study by the Biden administration this past autumn revealed that 400 billionaire households paid an average of only 8.2% in taxes on their income between 2010 and 2018. This rate is often below that of many regular American households.

The new proposal will dramatically change the taxes paid by US billionaires. For example, Tesla boss Elon Musk would pay an additional $50 billion in taxes, while Amazon founder Jeff Bezos would pay close to $35 billion more, according to figures deduced by University of California Berkeley economist Gabriel Zucman, cited by The Washington Post.

Higher taxation for billionaires has long been a demand of the political left. But the new measure still requires congressional approval. It could raise up to $360 billion in new revenue over a 10-year period.

The Biden administration inherited a budget deficit that equaled 14.9% of the entire US economy from the former Trump administration. However, the deficit starting in the upcoming budget year will be below 5% of the economy, experts have said.