Tipsheet

'This Is Insanity': Democrats Discuss New Plan to Help Pay for Massive Spending Bill

Leah Barkoukis
Leah Barkoukis  |  October 25, 2021 7:00 AM

Senior Democrats confirmed that a proposal to tax billionaires’ unrealized capital gains will likely be included in President Biden’s $2 trillion spending package.

Treasury Secretary Janet Yellen explained on CNN Sunday that the proposal, raised by Sen. Ron Wyden, D-Oregon, would impose an annual tax on unrealized capital gains on liquid assets.

“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.

The tax is expected to affect people with $1 billion in assets or $100 million in income for three consecutive years, according to a person familiar with the discussions. The idea, for which President Biden recently expressed support after excluding it from his campaign plans and administration agenda, would affect a narrower group of people than the capital-gains changes that have already flopped among congressional Democrats. […]

When compared with the tax-rate increases in the House bill, the emerging Wyden proposal would be significantly more progressive, in that it would raise its money from the very, very rich—likely fewer than 1,000 taxpayers—instead of the merely rich. But House Democrats have questioned whether it makes sense to add a relatively untested idea at this late stage. (WSJ)

The proposal was blasted on social media as sheer lunacy.