According to President Joe Biden’s administration reports, households earning more than $100 million would be taxed at least 20% on their entire income under the so-called “Billionaire Minimum Income Tax” plan.
This tax band affects around 700 families in the United States. Several US media sites claimed Sunday that US President Joe Biden‘s administration has been planning to present a proposal to raise taxes on the wealthiest Americans.
According to a White House memo obtained by The Washington Post, it will get included in the 2024 budget plan, which gets anticipated to get published on Monday. Furthermore, the report reveals the so-called “Billionaire Minimum Income Tax” plan would levy a 20 percent minimum tax on households worth more than $100 million (€91 million).
That will work toward reducing anticipated budget deficits by more than $1 trillion over the next decade. The report stated, “This minimum tax would ensure that the wealthiest Americans no longer pay a tax rate lower than teachers and firemen.”
Who would pay a higher price?
The idea, which represents a significant reorientation of the US tax structure, would affect the wealthy 0.01 per cent of families. Half of the estimated income in this group would come from families worth $1 billion or more.
The idea would prevent the United States’ wealthiest citizens from paying lower rates than those who consider themselves middle-class. In particular, according to a study released by the Biden administration this autumn, 400 billionaire households spent an average of only 8.2 percent in taxes on their income between 2010 and 2018.
This rate is frequently lower than that of many average American families. The new idea will significantly alter the taxes paid by billionaires in the United States. As per statistics calculated by University of California Berkeley economist Gabriel Zucman and published by The Washington Post’, Tesla CEO Elon Musk would spend an additional $50 billion in taxes. And Amazon CEO Jeff Bezos would spend close to $35 billion more.
Need for Additional Permissions
The political left has long advocated for higher taxes on billionaires. However, the revised bill still has to be approved by Congress. Over ten years, it might generate up to $360 billion in additional income.
The former Trump administration left the Biden administration with a budget deficit equal to 14.9% of the whole US GDP. Experts predict that the deficit will be less than 5% of the economy starting in the next fiscal year.
Edited by Subbuthai Padma
Published by Iram Rizvi
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