- Treasury Secretary Janet Yellen told ABC News the Biden administration is undecided on a wealth tax.
- The White House had previously indicated it was against a wealth tax due to implementation issues.
- Bloomberg reports wealthy Americans and corporations are likely to face tax hikes anyway.
- See more stories on Insider’s business page.
In an interview, Treasury Secretary Janet Yellen was questioned by ABC’s George Stephanopoulos about the potential future a wealth tax, and she signaled it’s not out of the question for the Biden White House.
After Stephanopoulos asked if there would be “no wealth tax,” Yellen said “that’s something that we haven’t decided yet, and can look at.” She also said that President Biden has put forth some alternatives, including higher taxes on individuals and corporations, “that are similar in their impact to a wealth tax.”
Sen. Elizabeth Warren recently reiterated her calls for a wealth tax by introducing the Ultra-Millionaire Tax Act. That would enact a 2% tax on households with a net worth between $US50 ($65) million and $US1 ($1) billion, and a 3% tax on those households with net worths over $US1 ($1) billion.
Previously this year, Yellen had said that she wasn’t planning on a wealth tax, as it’s something with “very difficult implementation problems.” She also said a wealth tax had been discussed, but wasn’t favored by the president.
An analysis from economists at the University of California at Berkeley, which was cited in Warren’s press release, found that a wealth tax could bring in over $US3 ($4) trillion in revenue in 10 years.
Yellen also told Stephanopoulos that Biden “hasn’t proposed a wealth tax but he has proposed that corporations and wealthy individuals should pay more in order to meet the needs of the economy, the spending we need to do, and over time I expect that we will putting forth proposals to get deficits under control.”
Wealth tax or not, wealthy Americans might still see some significant tax changes
Separately, Bloomberg reports that Biden is planning on “the first major federal tax hike since 1993,” which would serve to fund a post-stimulus economic program.
Per Bloomberg, policies under consideration include an increase to the corporate tax, something Biden had already said he would like to raise to 28% from 21%. Additionally, tax preferences for “pass-through entities” might be cut back, and the estate tax could also see an expansion in scope.
Bloomberg also reported that potential planned “regulatory projects” on estate and gift taxes, some of which were deprioritized or reduced under the Trump administration, could reappear in the Biden administration. One particularly significant area, according to Bloomberg, is the future of valuation discounts for assets, which could become more limited.
There are also some measures targeting higher-earners: Hikes to the income tax for those making over $US400,000 ($517,416) and higher capital-gains tax rates for those making at least $US1 ($1) million are both reportedly on the table, according to Bloomberg.
Currently, the Biden administration is contemplating the best way to pay for its upcoming economic initiatives, according to the Wall Street Journal. House Democrats are already getting to work on an infrastructure package, Insider’s Joseph Zeballos-Roig reported.