Corporate leaders who backed President Joe Biden in the 2020 election conveyed deep skepticism that the so-called “billionaire’s tax” Biden proposed in his State of the Union address Tuesday night would ever become law.
The plan would require households with a net worth above $100 million to pay a minimum annual tax of 20% on both their standard taxable income and on gains in the total value of their “tradable assets,” which includes stocks, bonds, mutual funds and other securities.
Under current tax law, securities gains aren’t taxed until the owner sells them. Under Biden’s proposal, the ultra-wealthy would owe an annual tax of 20% on unrealized gains or losses in the value of those assets, whether or not they had actually pocketed that gain by selling them.
The plan is “DOA and stupid to boot,” billionaire investor Leon Cooperman told CNBC in an interview. Cooperman says he voted for Biden in 2020, but he accused Democrats of deliberately misleading people about how the billionaire tax proposal would work.
They “lie about the taxes billionaires pay,” he said, “as they include unrealized gains as part of income.”
White House economist Jared Bernstein disputed this, telling CNBC Wednesday that “unrealized gains” were not what was being taxed.
“What it really is, or at least the way we see, it is a prepayment or withholding tax on future capital gains,” he said Wednesday on “Squawk Box.” The White House didn’t respond to follow-up questions from CNBC about the plan.
The billionaire tax proposal is “completely dead on arrival,” said Charles Myers, a 2020 bundler for Biden’s presidential campaign and the chairman of Signum Global, an investment advisory firm.
Myers said the purpose of Biden’s billionaire tax announcement, however, was never to jumpstart a negotiation in Congress.
“Last night was Biden’s unofficial 2024 reelection launch,” Myers told CNBC in an interview. The billionaire tax plan, he said, was part of his campaign “messaging points.”
“Those tax increases…
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