STATEMENT: Billionaires Income Tax Is a Powerful Tool To Fight Exploding Economic Inequality
Washington, D.C. — Today Sen. Ron Wyden (D-OR), chair of the Senate Finance Committee, proposed the Billionaires Income Tax. The proposal would ensure that roughly 700 of the richest Americans pay their fair share in taxes. Following the announcement of the bill, Seth Hanlon, senior fellow at the Center for American Progress, released the following statement:
Chair Wyden’s proposal takes direct aim at the biggest inequity in the tax code—the fact that some of the wealthiest people in history pay lower taxes on their real incomes than middle-class Americans. Just as workers pay taxes with every paycheck, billionaires should pay taxes as their fortunes grow. This is a critical proposal that all members of Congress should get behind.
More broadly, the billionaires’ tax is a powerful response to the defining economic issue of our time—exploding economic inequality. Taxing billionaires’ gains and investing in clean energy, child care, and child tax credits lays the groundwork for a stronger, more dynamic, and more inclusive economy.
Sen. Wyden first proposed his mark-to-market system for taxing the unrealized gains of the very wealthy in a speech at the Center for American Progress Action Fund in 2019.
The Center for American Progress has long called on Congress to fix the broken system for taxing capital gains that often allows billionaires to avoid paying income taxes entirely. CAP wrote a report on “Ending Special Tax Treatment for the Very Wealthy” in June 2019 that identified the failure to tax unrealized gains as the most significant way the tax code favors the very wealthy. As part of its “America Can Do Big Things” budget plan in June 2019, CAP proposed a mark-to-market system to pay for investments such as clean energy, child care, and a fully refundable child tax credit. More recently, CAP emphasized that fixing the system where billionaires permanently avoid taxes on trillions of dollars on capital gains is the most urgent priority in progressive tax reform. And a recent CAP column illustrated how billionaires pay lower tax rates than typical middle-class families.
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