Government Connection

Democrats Detail Tax Hike Alternatives

Democratic lawmakers on Tuesday, October 26, 2021, rolled out a pair of proposals to tax corporations and the wealthy without raising standard tax rates, their latest bid to find consensus behind revenue-raising measures to fund President Joe Biden’s economic agenda. Senate Finance Chairman Ron Wyden (D-Ore.) joined with Sens. Elizabeth Warren (D-Mass.) and Angus King (I-Maine) on Tuesday to release a proposed 15% minimum tax for corporations, which would apply to companies that report more than $1 billion in profits to shareholders. The minimum tax would apply to about 200 companies, according to a summary, and King estimated it would raise $300 billion to $400 billion over a 10-year window. In addition, Senator Wyden unveiled his plan to tax the unrealized capital gains of the ultra wealthy. The plan seeks to tap some of the $5 trillion in untaxed investment gains held by a group of 700 billionaires. Under current law, investment returns are taxed only when assets are sold. But Wyden claims billionaires rarely sell those assets, count them as income, or get taxed for them. Most assets would be subject to long-term capital gains tax, which is currently 23.8%. Some illiquid assets would face additional charges, but rates wouldn’t rise above 49%, according to a detailed outline of the plan.

October 29, 2021

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