Senator Ron Wyden (D-OR) put forth a proposition suggesting a tax on the gains of individuals with a worth exceeding $1 billion or those who have earned over $100 million annually for three consecutive years. This proposal is a part of Wyden’s efforts to establish a mark-to-market law. While initially presented in 2021 as part of President Joe Biden’s agenda, it is now being formally introduced for the time.
The proposed legislation suggests a modification to the tax policy in the United States. It aims to impose taxes on gains impacting assets like stocks, bonds and similar investments that are commonly favored by wealthy individuals. The legislation specifically targets strategies employed by billionaires to evade tax obligations. The wealthiest Americans often invest in assets that appreciate over time but delay paying taxes on those gains until they cash out. This enables billionaires to borrow against their gains and use them for investments. According to Wyden’s proposed law, these gains would be subject to taxation even if they haven’t been realized yet.
“America’s tax code is riddled with loopholes that allow the ultra-wealthy to get away without paying their fair share while working families have to play by a different set of rules and pay taxes out of each paycheck,” Wyden said. “You can only have a successful economy if you have a tax code that treats everyone fairly. My billionaires income tax will make that a reality by ensuring those at the very top start paying their fair share, just like the rest of us.”
The proposed changes will only affect around 700 of the wealthiest Americans, who represent a class of incredibly high-earning and high-investing citizens.
The bill is co-sponsored by several left-leaning senators: John Fetterman (D-PA), Bernie Sanders (I-VT), Jeff Merkley (D-MA), and Elizabeth Warren (D-MA), as well as others. They argue that this bill would help fund programs such as Medicare and Social Security, which will encounter existential funding problems in the very near future.
“For too long, billionaires have rigged the rules to cut their taxes to the bone, all while working families struggle to make ends meet,” Warren said. “We should be investing in American families, not letting billionaires off the hook—and the billionaires income tax takes an important step to make our tax system fairer.”
However, the bill has little to no chance of passing in Congress, which is controlled by a Republican party that opposes this kind of tax policy. Centrist Democrats in the Senate, such as Sen. Joe Manchin (D-WV), also have reservations about the bill.
Wyden’s proposed bill arrived the same week as another bill addressing similar concerns was proposed by Reps. Don Beyer (D-VA) and Steve Cohen (D-TN). Their proposal, which had been introduced once before, would place an annual minimum 35% tax rate on the full income of households valued at more than $100 million. This bill would also tax both realized and unrealized gains and had the vocal support of President Biden.
The continued proposal of bills such as that brought by Wyden and that brought by Beyer and Cohen represents an ongoing effort by Democrats and left-leaning lawmakers to target the unrealized gains of the wealthiest Americans.
