Background: President Joe Biden's 2023 budget is reportedly set to establish a Billionaire Minimum Income Tax. The tax would ensure that the wealthiest Americans pay a tax rate of at least 20 percent on their income, including unrealized appreciation. U.S. billionaires got 62% richer during the pandemic.
Billionaire wealth: Most billionaires’ wealth is in the form of assets like properties and stocks. Our current tax system works on a cash event basis, so when something is bought or sold, it gets taxed. In this system, billionaires can grow their wealth without paying increased taxes—their assets appreciate but are never sold or realized.
Taxing unrealized appreciation: As a solution, Democrat lawmakers propose taxing billionaires’ unrealized gains. Advocates claim that it leads to a fairer taxing system for the rich, and critics argue that it's a logistical nightmare and a slippery slope that could tax the middle classes' unrealized gains.
A distraction: Regular Americans and small businesses have been crushed during the pandemic. Instead of focusing on relief for them, the Biden administration is looking to increase tax revenue, a measure that won't help those who need it.