Biden calls to up taxes on rich

President Biden resurrected his plan for a so-called “billionaire’s tax” during his second State of the Union address on Tuesday night.

The 80-year-old president first proposed a minimum tax on the super-rich in March 2022, which would have called for households worth more than $100 million to pay at least 20% in taxes on both income and “unrealized gains” — the increase in an unsold investment’s value.

The pitch was removed from the Inflation Reduction Act over the summer at the insistence of Sen. Joe Manchin (D-W. V.) after Republicans characterized the proposal as a tax hike on middleclass Americans.

“President Biden is a capitalist and believes that anyone should be able to become a millionaire or a billionaire. He also believes that it is wrong for America to have a tax code that results in America’s wealthiest households paying a lower tax rate than working families,” the White House said ahead of the address.

“This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.”

The administration claimed that billionaires pay an average tax rate of 8% in a “typical year.” That figure is disputed, however, since it is based on a calculation of rates that counts unrealized capital gains as income — which is not the case under current federal law.

A 2019 study by two economists at the University of California, Berkeley estimated that the 400 wealthiest households in America paid an average tax rate of about 23% the previous year.

According to Internal Revenue Service data cited by the Tax Foundation from 2020, the most recent year for which records are available, the top 1% of taxpayers paid 42.3% of federal income taxes.

The same analysis found that the top 5% of earners paid 62.7% of federal income taxes in 2020, while the top 10% paid 73.7% of all income taxes.