WASHINGTON, D.C. — Senator Ron Wyden, D- Ore., unveiled an updated version of the Billionaires Income Tax on Wednesday. Sen. Wyden, who is also the Senate Finance Committee Chair says this legislation would “ensure billionaires pay tax every year, just like working Americans.”
The Billionaires Income Tax would apply to taxpayers with more than $1 billion in assets or more than $100 million in income for three consecutive years. “There are two tax codes in America. The first is mandatory for workers who pay taxes out of every paycheck. The second is voluntary for billionaires who defer paying taxes for years, if not indefinitely,” said Wyden.
Tradable assets like stocks would be marked-to-market every year. Non-tradable assets like real estate or business interests would not be taxed annually. When billionaires sell non-tradable assets, they would pay capital gains tax, plus an interest charge.
According to Politico, Wyden figures it would hit around 700 people, and expects it to generate several hundred billion dollars, though Congress’s official scorekeepers have not yet put a number on the plan.
The proposal contains rules to transition to the Billionaires Income Tax. For example, the first time billionaires’ tradable assets are mark-to-market, they may elect to pay the tax over five years. They may also elect to treat up to $1 billion of tradable stock in a single corporation as a non-tradable asset, which will ensure that the proposal does not affect the ability of an individual who founds a successful company to maintain their controlling interest.
Additionally, the proposal contains rules to prevent avoidance of the Billionaires Income Tax.
A one-page summary of the Billionaires Income Tax is available here.
A section-by-section summary of the Billionaires Income Tax is available here.
Legislative text of the Billionaires Income Tax is available here.