Biden’s Plan For A 20% Minimum Tax On The Ultra-Wealthy Is Fair And Makes Sense
The ultra-wealthy in America have all sorts of tricks at their disposal to avoid paying their fair share of taxes, which is
why it's not uncommon for a billionaire to end up with a lower-percentage effective tax rate than an average working American.
President Joe Biden's proposal to set a 20% minimum tax rate on the wealthiest households would end that inequity and help pay down the nation's budget deficit.
Biden's plan, part of the budget he announced last month, is far less sweeping than various progressive proposals for taxing the wealthy, some of which would be based not just on income but on accumulated wealth itself. Biden's approach wouldn't do that, though it would mean a major change in the way income is defined for the wealthiest Americans.
Most of the mega-wealthy keep much of their wealth in stocks and other investments, of course.
Those assets are not
normally taxed as they increase in value year to year, but rather are taxed only when they are cashed out.
For someone with enough holdings, it's possible to borrow money against the value of those investments and then live off the borrowed money, rather than liquidating the investments and having to pay taxes on them.
This is at base a tax-avoidance strategy, since borrowed money isn't taxed. Federal economists estimate that between 2010 and 2018, 400 billionaire families paid an average effective federal tax rate of a little over 8%, which is far less than millions of working Americans pay.
Biden's plan would begin with the premise that households worth $100 million or more must pay at least 20% in taxes on their income.
And income for those families would be redefined to include gains in the value of investments that have not yet been liquidated.
In that sense, it's less a tax hike than a requirement for tax pre-payment, since those taxpayers in theory would ultimately owe these taxes on growth anyway when they cash out the investment.
Any tax payments those families have to make on those investments under Biden's plan would be counted toward whatever they ultimately owe when they do liquidate the investments.
But this would end situations where families simply leave their investments in place for years or decades, refraining from liquidating them and
just living off loans and other assets.
As a White House summary document of the proposed
minimum tax puts it, "This approach means that the very wealthiest Americans pay taxes as they go, just like everyone else."
Polls have long shown that Americans believe by wide margins that the mega-wealthy should be paying more than they do in taxes, as a matter of basic fairness.
Biden's proposal would accomplish that with far less pain to those lucky few than many competing plans out there.- St. Louis Post-Dispatch



Biden Uses Tax Day To Draw Contrasts With GOP
Mississippi River Cities Anxious For Federal Dollars To Address Flooding
Advisor News
- The overlooked retirement security risk that must be addressed
- What advisors should know about hedge funds in retirement planning
- Retirement control is top success measure for middle class, ACLI says
- Industry groups applaud House passage of Financial Exploitation Prevention Act
- Younger workers more likely to be eligible for a retirement plan after changing jobs
More Advisor NewsAnnuity News
- Malibu Life Holdings Completes Acquisition of TruSpire, Establishing Malibu USA and Accelerating Entry into the U.S. Retail Annuity Market
- Why job boards are failing insurance agencies
- MassMutual Ranks No. 100 on the 2026 Fortune 500® List
- What’s fueling record annuity growth?
- Jackson Named InvestmentNews 2026 Annuities Provider of the Year
More Annuity NewsHealth/Employee Benefits News
- How health insurers get a free pass to deny coverage from a 52‑year‑old law meant to protect worker pensions
- Reports from Capital One AG Describe Recent Advances in Managed Care (Factors Affecting Medical Appointment Adherence among Adolescents and Young Adults with Kidney Disease: A Longitudinal Cohort Study): Managed Care
- Studies from University of Alabama Further Understanding of Neurology (Understanding stroke caregiving in rural contexts: a qualitative study of family caregivers’ cultural values, coping behaviors, and technology use): Health and Medicine – Neurology
- New state law will create more transparency of dental insurance benefits
- Rob Sand pledges to reverse Iowa Medicaid privatization
More Health/Employee Benefits NewsLife Insurance News
- NAIFA praises House committee approval of Clarity for Compensation Act
- PHL Variable liquidation pushed out to 2027, Connecticut regulators say
- ‘Recession-Proof’ Insurance Is Trending. Safety Net or Scam?
- Winged Keel Group Expands National Presence and PPLI Leadership, Welcomes SBSI, Inc. (dba NFP Insurance Solutions)
- MassMutual Ranks No. 100 on the 2026 Fortune 500® List
More Life Insurance News