US billionaires would pay tax on unrealised gains from their assets to help finance President Joe Biden's social policy and climate change legislation, a proposal unveiled on Wednesday by the top Senate Democrat for tax policy said.
The so-called billionaires tax, announced by Senate Finance Committee Chairman Ron Wyden, is part of a two-pronged legislative strategy that also includes a proposed 15 per cent minimum corporate tax on the most profitable US corporations.
Mr Wyden and other lawmakers, including Democratic Senator Elizabeth Warren, say the legislation is intended to curtail tax avoidance by corporations and the wealthy and could generate hundreds of billions of dollars to pay for Mr Biden's “Build Back Better” legislation, which is expected to cost between $1.5 trillion and $2tn.
The levy would apply to taxpayers who, for three consecutive years, have had assets worth at least $1 billion or have earned at least $100 million three years in a row.
The thresholds mean about 700 people would be affected, a summary of the plan showed.
But even if the proposal does pass, collecting the several hundred billion dollars that Mr Wyden’s office says it will raise depends on the rules withstanding probable court challenges and loophole-seeking by those in the Internal Revenue Service’s sights.
“There are two tax codes in America. The first is mandatory for workers who pay taxes out of every paycheck. The second is voluntary for billionaires who defer paying taxes for years, if not indefinitely,” Mr Wyden said in a statement.
“Two tax codes allow billionaires to use largely untaxed income from wealth to build more wealth.”
The White House backs the corporate minimum tax, which would dovetail with a global corporate minimum tax recently agreed to by 136 countries and aimed at corporations that pay little or no tax by gaming the international tax system.
But the billionaires tax faces potential opposition from Democrats in the House of Representatives, who favour straightforward increases in tax rates for companies and the wealthy as a way to fund the Biden agenda.
Tesla chief executive Elon Musk blasted the plan on Twitter.
“Eventually they run out of other people's money and then they come for you,” said Mr Musk, who early this week was worth about $230bn, Refinitiv reported.
Not all billionaires are opposed to the plan. George Soros, the investor and liberal activist, is “supportive”, his representative told Reuters on Monday.
Aides said the 23.8 per cent tax rate for long-term capital gains on tradable assets, such as stocks that increase in value over the year whether or not they have been sold. It would also allow taxpayers to take deductions for losses on assets.
Agencies contributed to this report
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Email sent to Uber team from chief executive Dara Khosrowshahi
From: Dara
To: Team@
Date: March 25, 2019 at 11:45pm PT
Subj: Accelerating in the Middle East
Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.
Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.
I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.
This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.
It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.
Uber on,
Dara
Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
Scoreline
Australia 2-1 Thailand
Australia: Juric 69', Leckie 86'
Thailand: Pokklaw 82'
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
