President Joe Biden will propose a minimum tax of 20 percent on households that are worth more than $100 million.
A fact sheet released over the weekend by the White House budget office also shows that Biden will cut projected budget deficits by more than $1 trillion over the next ten years.
A minimum tax on the wealthiest people in the country would represent a significant change in the direction of the country’s tax code. It would apply to only the top 0.01 percent of people, effectively preventing the small wealthy sliver of Americans from paying low tax rates. Half of the expected revenue would come from households that are worth at least more than $1 billion.
The proposal is expected to be announced today.
Experts say that the lower deficits will reflect the economy’s resurgence as the U.S. emerges from the Covid pandemic, which has greatly affected the U.S. economy over the past couple of years. Experts say that it is a sign that the government’s balance sheet will improve after there was a historic burst of spending in order to combat and address the Covid pandemic.
The proposed budget year begins on October 1. The proposal shows that the burst of spending did help to fuel growth economically, and that government finances will actually be in a more stable place for the next few years as a result of that.
A White House official said that the budget proposal shows that Democrats can deliver on what Republicans have promised before, but had been unsuccessful in doing: faster growth and falling deficits.
Republicans are expected to say that a wealth tax will hurt the economy because it will diminish private investments in companies. Republicans have said that the Biden White House’s spending in the past year has created economic pain through high prices, and have been critical of inflation.
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