US Democrats’ tax targeting billionaires hit with criticism

US President Joe Biden said it would be “very, very positive" to get proposed tax measures passed. before he departs for two summits. Photo: REUTERS/Jonathan Ernst

Lisa Mascaro, Darlene Superville and Alan Fram

October 27 2021 02:30 AM

The Democrats’ idea for a new billionaires’ tax to help pay for US President Joe Biden’s social services and climate change plan quickly ran into criticism as too cumbersome with some lawmakers preferring the original plan of simply raising the top tax rates on corporations and the wealthy.

The package is tallying at least $1.75trn (€1.51trn), and could still be more.

US President Joe Biden said it would be “very, very positive to get it done” before he departed for two overseas global summits.

Resolving the revenue side is key as the Democrats scale back what had been a $3.5trn plan, insisting all the new spending will be fully paid for and not pile onto the debt. Mr Biden vows any new taxes would hit only the wealthy, those earning more than $400,000 a year, or $450,000 for couples.

The White House had to rethink its tax strategy after one key Democrat, Senator Kyrsten Sinema, objected to her party’s initial proposal to raise tax rates on wealthy Americans by undoing the Trump-era tax cuts on those earning beyond $400,000.

Ms Sinema also opposed lifting the 21pc corporate tax rate.

With a 50-50 Senate, Mr Biden has no votes to spare in his party.

The billionaires’ tax is being modelled on a 2019 bill from Democratic Senator Ron Wyden to treat assets as income. Under Mr Wyden’s emerging plan, the billionaires’ tax would hit the wealthiest of Americans, fewer than 1,000 people.

Senate Republican leader Mitch McConnell called it a “hare-brained scheme” and warned of revenue drying up during downturns. Some Republicans indicated such a tax plan could be challenged in court.