- US Treasury Secretary Janet Yellen confirms lawmakers are still floating the idea of a tax on unrealised capital gains for the utlra-rich
- The tax would require ultra-wealthy Americans to report on the gains and losses of their assets and pay taxes on any appreciation — even though they’re yet to sell the assets
- The plan is one of the options floated by Democrats to fund President Biden’s social spending bill, which could reach upwards of US$3.5 trillion (A$4.67 trillion)
- Ms Yellen and House Speaker Nancy Pelosi both say the plan is likely to be made law, though there are some discrepancies around the tax’s branding
- Ms Pelosi says Democrats have almost agreed to all aspects of the funding package for President Biden’s spending plans
United States Treasury Secretary Janet Yellen has confirmed lawmakers are still floating the idea of a tax on unrealised capital gains for the super-rich to help fund the Biden administration’s massive social and climate-change spending agenda.
It’s an idea President Biden backed last month, and both Ms Yellen and Democrat House Speaker Nancy Pelosi said the plan is likely to be made law, though there are some discrepancies around the tax’s branding.
The plan, proposed by the head of the Senate Finance Committee, Ron Wyden, would see the US’ ultra-wealthy pay taxes on the unrealised capital gains of liquid assets.
The details of the tax — including the rate at which the unrealised gains will be levied — are yet to be confirmed, but Mr Wyden has allegedly been working on the proposal for several years.
Effectively, the tax would require ultra-wealthy Americans to report on the gains and losses of their stocks, bonds and other assets, and pay taxes on any appreciation — even though they’re yet to sell the assets.
It’s not been confirmed whether or not these taxpayers will be able to claim tax breaks on unrealised losses.
According to a Wall Street Journal report, the tax will only affect US taxpayers with more than US$1 billion (A$1.34 billion) in assets or those who have made over US$100 million (A$134 million) in income for three years in a row. This is allegedly fewer than 1000 people.
The plan is one of the options floated by Democrats to fund President Biden’s social spending bill, which could reach upwards of US$3.5 trillion (A$4.67 trillion).
Ms Pelosi told CNN’s ‘State of the Union’ on Sunday the Democrats’ plan will “probably have a wealth tax,” referring to the tax on unrealised gains.
However, Ms Yellen said she wouldn’t refer to Senator Wyden’s plan as a “wealth tax.”
“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 realised,” Ms Yellen said.
“It’s not a ‘wealth tax’, but a tax on realised capital gains of exceptionally wealthy individuals.”
Ms Pelosi said Democrats had almost agreed to all aspects of the funding package for President Biden’s spending plans.