President Joe Biden plans to propose a “Billionaire Minimum Income Tax” that would cut projected budget deficits by more than $1 trillion over the next decade, CNBC reported on Monday.
The proposal is part of his 2023 budget that is expected to be announced on Monday.
Biden proposed a minimum 20 percent tax on households worth more than $100 million, which means it would affect the top 0.01 percent of households, with half of the expected revenue coming from those worth $1 billion or more.
"As a result, this new minimum tax will eliminate the ability for the unrealized income of ultra-high-net-worth households to go untaxed for decades or generations," an obtained document says.
If a wealthy household currently pays less than 20%, they will be charged a "top-up payment" to meet the new minimum tax requirement under Biden's new proposal.
Bloomberg earlier reported that Biden is preparing the first massive US tax hike since 1993 amid the administration’s unprecedented spending for social programs and stimulus payments to boost the economy, badly affected by the pandemic.
Speaking before the US Congress last month, Biden said that one of the main goals of his administration is to reduce the country's budget deficit by more than one trillion dollars. The deficit has already been reduced from $3.1 trillion to $2.8 trillion in the last fiscal year, and a 1.4 trillion goal was set for the current year.
The recently proposed income tax could reduce the deficit by about $360 billion in the next decade, with over half of the revenue coming from those worth more than $1 billion, according to CNBC.
Since Biden signed a $1.9 trillion economic stimulus package last March and an unprecedented $1.2 trillion US infrastructure spending bill in November, the administration has raised various proposals to increase taxes on wealthy Americans, including raising the corporate tax from 21 to 28 percent, eliminating tax breaks for LLCs and increasing income tax for people who earn more than $400,000, as well as a higher capital gains tax rate for people who earn at least $1 million a year.
The proposed tax hikes have been criticized by Republicans, who have warned that increased tax pressure would diminish private investment in companies that create jobs and cause the wealthy to move their resources abroad, according to Yahoo News.