Mitch McConnell slams Democrats' proposal to tax billionaires, calling it a 'hair-brained scheme' to penalize people who 'invested wisely'

Senate Minority Leader Mitch McConnell. AP Photo/Manuel Balce Ceneta
Mitch McConnell criticised Democrats' plan for taxing billionaires' assets as a "hair-brained" scheme.

Ron Wyden's proposal would tax annually the increase in wealth of wealthy individuals' assets.

McConnell claimed it was penalizing people who "invested wisely."

Democrats have a plan to finance their reduced social-spending bill by imposing a tax on billionaires assets. On Monday, Senate Minority Leader Mitch McConnell was quick to reject that idea.

McConnell stated that the scheme was a hairy one and would see the IRS (Internal Revenue Service), penalizing those who invest wisely and compensating those who have invested poorly." McConnell made these remarks in remarks to the Senate floor.

McConnell was referring specifically to Ron Wyden, Senate Finance Chair, Ron Wyden's "billionaires tax", which would impose annual taxes on the increase in assets of the most wealthy Americans. This would apply even if the assets are not sold or "realized." Stocks are currently subject to tax only when they are sold. This acts as an incentive to keep them unsold and pass on to their heirs.

Insider reported that Wyden's proposal is different from Massachusetts Senator Elizabeth Warren's ultramillionaire taxes. This would impose a 2% tax for households with net worths between $50 million to $1 billion and a 33% tax for households with net worths over $1 billion. While Wyden's proposal may not be the wealth tax that the public supports, President Joe Biden has previously stated that he supports the proposal.

Republicans are determined to oppose any tax increase on corporations and the wealthy. McConnell stated that even after "disapointing" job reports and "one historical inflation report after the other," Democrats believe big tax increases "are exactly what the doctor ordered."

McConnell stated that President Joe Biden and our Democratic colleagues are working behind closed doors to find creative ways to take literally historic amounts from the American people's funds.

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The core goal of Democrats' social-spending bill is for the wealthy to pay their fair share. Wyden's taxing billionaires may be the best way to do that. Insider's Joseph Zeballos - Roig reported that Arizona Senator Kyrsten Sinema, a centrist Democratic defender of Biden's economic agenda, opposes President Donald Trump's tax cuts. This means Democrats might not be able change the tax code on the scale they hoped. West Virginia Senator Joe Manchin, another centrist Democrat, has said he is open to a tax on a billionaire.

Democrats do not need Republican support to pass reconciliation bills. They will likely be able include some tax on the rich since they don't have to get Republican support. However, Sinema Manchin's opposition against a number progressive priorities in the bill has already led to measures such as free community college and an expanded five-year child tax credit being dropped.

Business Insider has the original article.