House Speaker Nancy Pelosi said on Sunday that a wealth tax will “probably” be introduced, “but it’s only 10 percent of what we need” to pay for the social spending bill being negotiated in Congress.
She said that the tax on billionaires’ assets would bring around $200 billion to $250 billion in revenue over 10 years.
The tax “has an appeal, but it doesn’t produce that much money…the bill is not written yet. We hope it will be written today and introduced tomorrow,” she said on CNN’s State of the Union. “Only then can the joint tax committee evaluate what it brings in. We anticipate $200 to $250 billion, but we need closer to $2 trillion.”
The package aims to improve childcare, paid leave, Medicare, and housing and address the climate crisis among other proposals.
Treasury Secretary Janet Yellen said Sunday on CNN that a tax proposed by Senate Finance Committee Chair Ron Wyden would involve annually taxing unrealized capital gains on liquid assets that belong to billionaires.
“I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized,” Yellen said.
Wyden’s tax proposal will include a one-time tax on gains made to date, according to the Wall Street Journal. So a company founder with $5 billion mostly in unrealized gains would be taxed more heavily than an individual who just inherited that amount and has no such gains under the tax code.
Democrats in the House had hoped to increase the corporate tax rate from 21 percent to 26.5 percent, the top capital gains rate from 23.8 percent to 28.8 percent, and the top individual rate to 39.6 percent from 37 percent, according to the Journal. They also want a 3 percent surtax applied on income over $5 million.
Republican lawmakers have criticized Democrats about the proposed taxation and spending costs that are being currently negotiated, arguing that it would increase inflation, among other risks. Meanwhile, the National Taxpayers Union said that under the tax on billionaires, business investors would struggle and more bureaucracy would be added to the taxation system.
“There’s little confusion about the devastating economic impacts Democrats would bring about by ramming through their reckless taxing and spending spree: more taxes, more debt, and more painful inflation,” Senate Minority Leader Mitch McConnell said Thursday, according to the Journal.
Newsweek contacted Pelosi’s office, McConnell’s office, and the National Taxpayers Union for comments.
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