President Biden revealed his budget proposal for the 2023 fiscal year on Monday, which includes a new provision that would force billionaires and other high earners to pay more in taxes.
In remarks at the White House, Biden touted the “Billionaire Minimum Income Tax” plan as a way to make the tax system more equitable and ensure households and individuals with the highest incomes pay a fairer share.
"For most Americans, the last few years were very hard, stretching them to the breaking point,” Biden told reporters at the White House “But billionaires and corporations got richer than ever.”
Under the proposal, households making $100 million or more per year would be required to pay a minimum rate of 20 percent on their total income, which in the updated scheme would include unrealized capital gains.
Such a requirement would generate much more tax revenue from billionaires like Tesla CEO Elon Musk, whose net worth has soared over the last two years thanks to his company's skyrocketing stock price. Under the current structure, those gains are only taxed once they are sold for a profit.
A report from the progressive think tank Institute for Policy Studies and Americans for Fair Taxation found that U.S. billionaires saw their collective wealth grow by $1.8 trillion from March 2020 to August 2021.
"I'm a capitalist," Biden said. “If you make a billion bucks, great. Just pay your fair share. Pay a little bit.”
According to a White House estimate, the new minimum tax would raise $360 billion in revenue over a decade.
Presidents release a budget each year and submit it to Congress, though lawmakers rarely take the president's preferences into account when crafting the final federal budget each year. That reality makes the yearly budget proposal more of a statement of the administration's goals and priorities.
In addition to the billionaire tax proposal, Biden's budget also includes a bump of the corporate tax rate to 28 percent, investment in clean energy, and an increase in defense spending amid the Russian invasion of Ukraine.
The increase in defense spending is likely to rankle progressives in the president's party. The proposal includes $813 billion for the Pentagon, a $31 billion increase over last year's budget. That includes $682 million in aid to Ukraine.
Sen. Bernie Sanders (I-Vt.), the chairman of the Senate Budget Committee and one of the most prominent progressives in Congress, said in a statement that the proposed increase in defense spending is unnecessary.
“At a time when we are already spending more on the military than the next 11 countries combined, no we do not need a massive increase in the defense budget,” Sanders said.
The president also highlighted what he called the “Bipartisan Unity Agenda,” which draws on policies he laid out in his State of the Union address earlier this month, including combating the opioid epidemic, investing in mental health care, and finding a cure for cancer.
Prior presidents have made similar overtures to bipartisanship in the past which have not resulted in the passage of major legislation. The president's budget has so far failed to garner bipartisan praise, let alone support.
“What this budget shows is that President Biden values more spending, more debt, more taxes and more pain for the American people,” said Rep. Jason T. Smith (R-Mo.), who serves on the House Budget Committee, in a statement.
The budget includes another olive branch to Republicans and moderate Democrats: reducing the federal deficit. The proposal would reduce the federal deficit by more than $1 trillion over the next decade, addressing a key concern from lawmakers like Sen. Joe Manchin (D-W.Va.), who cited concerns about the deficit as a reason he could not support the president's Build Back Better proposal.
“Here's what this all adds up to,” Biden said. “Historic deficit reduction, historic investment in our security at home and abroad by modernizing our capabilities in both areas, and an unprecedented commitment to building an economy where everyone has a chance to succeed.”
Updated on March 28, 2022, at 4:50 p.m. ET with a new write-up.