Senate Democrats recently rushed to nail down the key details of a tax on the wealth of billionaires. This is part of many tax increases that are being proposed in order to fund a scaled-back bill that could address climate change and strengthen the social safety net.

The Democrats’ plans involve paying for about a total of $1.5 trillion in climate and social policy spending could essentially prove to be one of the most innovative components of the party’s legislation. 

Another measure that Senate Democrats have presented is to impose a 15 percent minimum tax on corporations, which will be based on the profits that these entities report to their shareholders (and not what they report to the IRS). 

The minimum corporate tax and the billionaires’ tax have faced a lot of skepticism among House Democrats, who have questioned the feasibility of these taxes. If the billionaires’ tax comes into force, billionaires, for the first time, would have to pay tax on unrealized gains in the value of their stocks, cash, and bonds. The courts will now have to decide if unrealized gains in wealth can even be considered income. 

“I’ve always felt that success was giving everybody in America the chance to get ahead, and what we’re dealing with here are flagrant loopholes in the tax code,” Senator Ron Wyden, Democrat of Oregon and chairman of the Finance Committee, said. He added, “They’re legal, but I’m going to close them.”

White House press secretary Jen Psaki acknowledged that the legislative package will not contain everything President Joe Biden wants, but she stated, “The alternative to what is being negotiated is not the original package; it is nothing.”