Biden to Include Minimum Tax on Billionaires in Budget Proposal

The White House wants Congress to pass a new minimum tax on billionaires as part of a budget proposal intended to reduce the national deficit.

The tax would require American households worth more than $100 million to pay a tax rate of at least 20 percent on their full income, as well as unrealized gains in the value of their liquid assets, such as stocks, bonds and cash, which can accumulate value for years but are taxed only when

It is the first time that Mr. Biden has called for a wealth tax. While many in his party have advocated taxes that target an individual's wealth, Mr. Biden has largely steered clear of such proposals in favor of increasing the top marginal income tax rate.

Only the top one hundredth of 1 percent of American households would be subject to theBillionaire Minimum Income Tax. If you pay more than 20 percent, you won't have to pay any additional taxes, but if you pay less, you will have to pay the difference between your current tax rate and the new 20 percent rate.

The minimum tax paid by Mr. Biden would count towards the tax that billionaires would eventually need to pay on assets that are only taxed when they are sold for a profit.

The tax proposal will be part of the Biden administration's budget request for the next fiscal year, which the White House plans to release on Monday. The minimum tax is a prepayment of tax obligations these households will owe when they realize their gains, according to a document from the White House.

The document said that the very wealthiest Americans pay taxes the same as everyone else.

The White House released a document on Saturday saying that Mr. Biden's budget proposal would cut federal deficits by a total of more than $1 trillion over the next decade.

The idea of imposing a wealth tax has gained traction since Mr. Biden was elected as Democrats look for ways to fund their climate and social policy agenda and ensure that the wealthiest Americans are paying their fair share.

Senator Elizabeth Warren, Democrat of Massachusetts, and Senator Ron Wyden, Democrat of Oregon, released separate proposals last year that would tax the wealthiest in different ways. The idea of a wealth tax was championed by Ms. Warren.

The administration's call for a wealth tax reflects political realities over how to finance Mr. Biden's economic agenda.

Moderate Democrats, including Senator Sinema of Arizona, have refused to raise the corporate tax rate or lift the top marginal income tax rate, leaving the party with few options to raise revenue.

The idea of taxing billionaires was slammed by Senator Joe Manchin III.

Legal questions about such a tax include whether a tax on wealth is constitutional. Wealthy Americans could mount a legal challenge to the wealth tax if it is approved by Congress.