Joe Biden’s ‘extremely radical’ billionaire tax plan is doomed Business

However, convincing one’s own party to back a budget that includes a wealth tax will prove tricky.

In a bid to win over the party’s stubbornly resistant moderates, Biden’s budget plans aim to cut the deficit by $1 trillion over the next decade. The White House hopes the tax targeting billionaires will raise $360 billion over the next decade, helping to fund increased spending without increasing borrowing.

Knightley says he has a much better chance than previous attempts to introduce a tax on billionaires, but adds that “it will still be a very low probability”.

“Democrats need something to motivate their electorate…if they can’t fulfill their tax promises to tax the rich more, it can lead to demotivation among their supporters,” he says.

While the hardline wing of the Democratic Party, including Bernie Sanders, has called for wealth taxes, a similar plan to hit billionaires proposed by Ron Wyden last year fell apart after a backlash within the left.

The Democrats also have a slim majority in the Senate, which is split 50-50 between the parties, with Vice President Kamala Harris as the tiebreaker.

A single rebel can be enough to block the party’s plans. Moderate West Virginia Democratic Senator Joe Manchin has been a constant thorn in the side of the president’s Build Back Better spending plans, rebelling over the size of the package and whether it would make inflation worse.

Manchin opposed billionaires’ tax proposals last year, saying, “I don’t like the connotation that we’re targeting different people.”

Paul Ashworth of Capital Economics says “extremely radical” proposals are unlikely to win support.

“It will never pass in a normal budget because it requires 60 votes in the Senate, which means 10 Republicans have to support it,” he says. “It could go through simple majority reconciliation, but Democrats have struggled to get Manchin to support such a bill. The addition of this tax increase measure does not change this calculation. »

Even if Biden can win his own party’s support, enforcing a wealth tax has proven difficult to pull off.

Although the idea is gaining voter support in opinion polls, there are practical hurdles that mean the number of wealth taxes around the world has declined in recent decades.