BOSTON — Members of the state’s congressional delegation are lining up behind President Joe Biden’s proposal to impose a new tax on the nation’s wealthiest as part of his preliminary budget plan.
On Monday, Biden unveiled a proposed minimum tax for billionaires as part of his 2023 budget request, suggesting a 20% rate that would target both the income and unrealized capital gains of households worth more than $100 million. The tax would impact about 700 billionaires nationwide, the White House said.
“President Biden is a capitalist and believes that anyone should be able to become a millionaire or a billionaire,” the Biden administration said in a statement. “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.”
Sen. Elizabeth Warren, D-Cambridge, who has proposed a millionaires’ tax, praised Biden’s proposal as “a step in the right direction” and said she will likely support it.
“I still support a wealth tax across the board, which is a different thing,” Warren told NBC’s Squawk Box on Tuesday. “I think we should have a small amount we pay every year on total wealth. The White House is focused on income, the appreciation that people are making year by year. I support them for that.”
“What this is about is people who are making their income from the appreciation stocks or other investments have to pay something to make this country run,” Warren added. “It’s way to say those at the top need to pay their fair share.”
Rep. Seth Moulton, D-Salem, says he also supports Biden’s effort to tax the nation’s top earners.
“There are massive loopholes in the American tax system and too many of the wealthiest people avoid paying their fair share,” Moulton said Tuesday. “The rest of us should not be carrying the load for the taxes they don’t pay.”
“There is no perfect solution, but President Biden’s proposal will help, especially since it is targeted to affect billionaires who are paying lower rates than working people,” he added.
Massachusetts is home to at least 18 billionaires, according to a recent report by Forbes magazine. They include Patriots’ owner Robert Kraft, net worth in 2020 was estimated at more than $6.9 billion, and Abigail Johnson, CEO of Fidelity Investments, net worth was valued at more than $10.8 billion, the report noted.
Biden’s proposal, a key provision of his fiscal year 2023 budget plan, would require billionaires to pay a tax rate of 20% on the combination of wages and unrealized gains. If a billionaire doesn’t pay 20% on their income, they will have to makes up the difference. Households paying 20% won’t be required to pay.
The White House estimates that the new tax would generate $360 billion in revenue over the next decade.
It’s not clear if the Democratic-controlled Congress will advance Biden’s proposed tax. Even some Democrats lawmakers have expressed skepticism about it.
Rep. Rich Neal, D-Springfield, chairman of the House Ways and Means Committee, issued a statement on Monday praising Biden’s budget proposal for its focus on ongoing pandemic relief, mental health services and other key issues, but made no mention of the proposed billionaires tax.
The tax is one of several proposals by Biden to fulfill his pledge to reduce the deficit. He has also proposed raising the corporate tax rate to 28% from 21% and a new minimum tax that targets offshore tax havens.
Rep. Lori Trahan, D-Westford, said she also supports Biden’s tax proposal and his administration’s effort to get the nation’s wealthiest to “pay their fair share” of the federal tax burden.
“By removing the ultra-wealthy’s ability to dodge taxes on their fortunes, we’ll be able to reduce the deficit, make meaningful investments in our country’s future, and create a fair economy that finally works for everyone,” she said.
Members of Biden administration were peppered with questions from lawmakers during a budget hearing on Tuesday, with Republicans questioning if raising the corporate tax rate would worsen the fiscal impact of record high inflation.
Biden’s push for the billionaires tax also comes as Massachusetts is weighing a new excise tax on the state’s top earners.
The referendum, which was cleared for the ballot by the state Legislature, will ask voters to amend the state Constitution to set a 4% surtax on the portion of an individual’s annual income over $1 million. Revenue from the new excise tax, if approved, would be devoted to transportation and education spending.
Critics say the proposed millionaires’ tax would hurt businesses, drive away the wealthy, and put a drag on the economy as it recovers from the pandemic.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at [email protected].