Senate Democrats Reportedly Near Agreement on Plan to Raise Taxes on Billionaires

Nicholas Reinmann / Forbes
Senate Democrats Reportedly Near Agreement on Plan to Raise Taxes on Billionaires Bernie Sanders, Nancy Pelosi and Charles Schumer. (photo: Chip Somodevilla/Getty Images)

Topline

Democrats in the U.S. Senate appear to be closing in on an agreement to create a new tax system for the country's richest people and families, and even centrists like Sen. Joe Manchin (D-W.Va.) and Sen. Kyrsten Sinema (D-Ariz.) appear to be onboard, according to The Washington Post.

Key Facts

The "Billionaires Income Tax" plan would create a new tax system solely targeting billionaires and those earning more than $100 million in income for at least three consecutive years.

Billionaires would be required to pay taxes annually on the increased values of stocks and bonds under the plan, even if they don't sell the assets, and could also pay more taxes on their real estate and other long-held assets that are not easily tradable, according to The Washington Post.

Senate Democrats are reportedly coalescing around the proposal, which could be included as part of a spending plan still being negotiated as centrists try to cut down a $3.5 trillion package that largely targets beefing up social and environmental programs.

Big Number

724. That's how many billionaires are in the U.S., according to the 2021 Forbes "World's Billionaires List."

What To Watch For

House Democrats are reportedly not keen on the tax plan, which is being drafted by Sen. Ron Wyden (D-Ore.), preferring another that has already passed the House chamber that would raise tax rates on wealthy Americans and corporations.

Key Background

The reported understanding between Democratic factions over taxing billionaires is in stark contrast to where things stand when it comes to spending tax dollars. Manchin and Sinema still remain apart from the rest of the party when it comes to the $3.5 trillion spending package, with the two demanding its price be slashed significantly. Negotiations remain ongoing, with President Joe Biden saying he believes a deal can be reached on a slimmed-down package costing between $1.9 trillion and $2.2 trillion. In the meantime, a vote in the House to approve a $1.2 trillion infrastructure deal remains on hold, as progressive Democrats in the chamber say they will not vote until there is agreement on the social spending package. Manchin and Sinema are key to moving the spending package forward, since Democrats are using the reconciliation process to pass it without any Republican support. Since the party controls the Senate by the thinnest possible majority, losing the support of either Manchin or Sinema would be enough to kill the package's chance of passing.

Tangent

Many of the wealthiest U.S. citizens have gone years without paying any federal income taxes, according to a bombshell ProPublica report released in June, citing leaked Internal Revenue Service documents.

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