Biden Targets Billionaires in Fiscal Year 2023 Budget 

Under President Biden’s budget for fiscal year 2023, billionaires would face a new tax. Among other administration priorities, the new tax covers the 20 percent increase in funding for the Department of the Treasury. According to the budget proposal, released March 28, the president’s Fiscal Year 2023 budget "includes a 20 percent minimum tax on multi-millionaires and billionaires who so often pay indefensibly low tax rates."

The minimum tax would apply to the wealthiest 0.01 percent of households. According to the White House, half of the revenue created from this tax, approximately $361 billion over the next ten years, would come solely from billionaires. In an independent "Greenbook" delineating the different tax provisions released in support of the White House budget, the proposal "would impose a minimum tax of 20 percent on total income, generally inclusive of unrealized capital gains, for all taxpayers with wealth of an amount greater than $100 million."

In line with this proposal, the minimum tax liability would equal the 20 percent tax rate times the sum of taxable income and unrealized gains (including on ordinary assets), less the sum of the taxpayer’s uncredited prepayments and regular tax.

The Greenbook, the Treasury’s explanation of tax proposals, covers many categories, including reforms to business and international taxation; credits to support housing and urban development; changes to fossil fuel taxation; credits to support families and students; modifications to estate and gift taxation; and the closing of loopholes.

A 20 Percent Increase for The Department of the Treasury

The White House is asking for a 20 percent increase in the discretionary funding for the Department of the Treasury. The $16.2 billion request represents a $2.7 billion increase from the 2021 enacted level. Of those funds, $14.1 billion would go to the Internal Revenue Service.

"This includes an increase of $798 million to improve the taxpayer experience and expand customer service outreach to underserved communities and the taxpaying public at large," the budget document states. "The Budget also provides $310 million for Internal Revenue Service Business Systems Modernization, which is 39 percent above the 2021 enacted level, to accelerate the development of new digital tools to enable better communication between taxpayers and the Internal Revenue Service."

The White House budget reports states that the rise in funding will also "facilitate effective oversight of high-income and corporate tax returns," but it did not offer details on how the funds would be spent on improving that oversight. Please contact us if you have any questions about the new taxes.