US billionaires would pay tax on unrealised gains from their assets to help finance President Joe Biden's social policy and climate change legislation, a proposal unveiled on Wednesday by the top Senate Democrat for tax policy said.
The so-called billionaires tax, announced by Senate Finance Committee Chairman Ron Wyden, is part of a two-pronged legislative strategy that also includes a proposed 15 per cent minimum corporate tax on the most profitable US corporations.
Mr Wyden and other lawmakers, including Democratic Senator Elizabeth Warren, say the legislation is intended to curtail tax avoidance by corporations and the wealthy and could generate hundreds of billions of dollars to pay for Mr Biden's “Build Back Better” legislation, which is expected to cost between $1.5 trillion and $2tn.
The levy would apply to taxpayers who, for three consecutive years, have had assets worth at least $1 billion or have earned at least $100 million three years in a row.
The thresholds mean about 700 people would be affected, a summary of the plan showed.
But even if the proposal does pass, collecting the several hundred billion dollars that Mr Wyden’s office says it will raise depends on the rules withstanding probable court challenges and loophole-seeking by those in the Internal Revenue Service’s sights.
“There are two tax codes in America. The first is mandatory for workers who pay taxes out of every paycheck. The second is voluntary for billionaires who defer paying taxes for years, if not indefinitely,” Mr Wyden said in a statement.
“Two tax codes allow billionaires to use largely untaxed income from wealth to build more wealth.”
The White House backs the corporate minimum tax, which would dovetail with a global corporate minimum tax recently agreed to by 136 countries and aimed at corporations that pay little or no tax by gaming the international tax system.
But the billionaires tax faces potential opposition from Democrats in the House of Representatives, who favour straightforward increases in tax rates for companies and the wealthy as a way to fund the Biden agenda.
Tesla chief executive Elon Musk blasted the plan on Twitter.
“Eventually they run out of other people's money and then they come for you,” said Mr Musk, who early this week was worth about $230bn, Refinitiv reported.
Not all billionaires are opposed to the plan. George Soros, the investor and liberal activist, is “supportive”, his representative told Reuters on Monday.
Aides said the 23.8 per cent tax rate for long-term capital gains on tradable assets, such as stocks that increase in value over the year whether or not they have been sold. It would also allow taxpayers to take deductions for losses on assets.
Agencies contributed to this report
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
Company profile
Name: Infinite8
Based: Dubai
Launch year: 2017
Number of employees: 90
Sector: Online gaming industry
Funding: $1.2m from a UAE angel investor
SPECS
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WORLD'S%2010%20HIGHEST%20MOUNTAINS
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If a business does not apply for the refund on time, they lose their credit.
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Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
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4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
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6. Further transfer pricing enforcement
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7. Limited time periods for audits
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9. Reduced compliance obligations for imported goods and services
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10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
UAE Team Emirates
Valerio Conti (ITA)
Alessandro Covi (ITA)
Joe Dombrowski (USA)
Davide Formolo (ITA)
Fernando Gaviria (COL)
Sebastian Molano (COL)
Maximiliano Richeze (ARG)
Diego Ulissi (ITAS)
The specs
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Transmission: eight-speed automatic
Power: 325bhp
Torque: 450Nm
Price: Dh289,000
Britain's travel restrictions
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- Complete passenger locator form
- Book a post-arrival PCR test
- Double-vaccinated must self-isolate
- 11 countries on red list quarantine
The specs
Engine: 2.0-litre 4-cylinder turbo hybrid
Transmission: eight-speed automatic
Power: 390bhp
Torque: 400Nm
Price: Dh340,000 ($92,579
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CHELSEA SQUAD
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MATCH INFO
Confederations Cup Group B
Germany v Chile
Kick-off: Thursday, 10pm (UAE)
Where: Kazan Arena, Kazan
Watch live: Abu Dhabi Sports HD
Roll of honour: Who won what in 2018/19?
West Asia Premiership: Winners – Bahrain; Runners-up – Dubai Exiles
UAE Premiership: Winners – Abu Dhabi Harlequins; Runners-up – Jebel Ali Dragons
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ARM%20IPO%20DETAILS
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The Freedom Artist
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MATCH INFO
Day 1 at Mount Maunganui
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Denly 74, Stokes 67 not out, De Grandhomme 2-28
New Zealand
Yet to bat
MATCH INFO
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Indoor cricket in a nutshell
Indoor Cricket World Cup – Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
