189 California billionaires face ‘minimum tax’ in Biden’s proposed plan

CALIFORNIA – Billionaire Mark Zuckerberg and other wealthy Golden State residents could pay 20% more taxes under a “Billionaire minimum taxproposed in President Joe Biden’s fiscal year 2023 budget proposal.

The Biden administration is asking Congress to approve the proposal, as part of its efforts to reduce the federal deficit over the next decade while funding new spending. The proposed tax on the ultra-wealthy would hit less than 1% of Americans, but “eliminates ineffective income protection for decades or generations,” the White House said Monday at a press conference.

Under the proposal, households worth more than $100 million would pay at least 20% taxes on income and “unrealized gains,” or the increase in value of an unsold investment. Many wealthy people keep those investments for decades, which means they’re never taxed, the administration said.

The tax would only apply to the one-hundredth of 1% of the wealthiest Americans, Biden said at a press conference, but would raise “$360 billion that can be used to reduce costs for families and reduce the deficit”.

Among those likely to be affected are the following California residents with a place on the Forbes Real Time Billionaires ranking:

  • Facebook’s Mark Zuckerberg, whose net worth was $97 billion as of Monday’s close of business;
  • Larry Page, Google, whose net worth was $91.5 billion as of Monday’s close of business;
  • Sergey Brin, Google, whose net worth was $89 billion as of Monday’s close of business;

“Now I’m a capitalist, but … if you make a billion dollars, great,” Biden said. “Just pay your fair share. Pay a little.

“A firefighter and a teacher pay more than double – double the tax rate a billionaire pays. That’s not fair. That’s not fair.”

The proposed policy is “extremely nuanced”, according to a Associated Press Explainer. This would allow wealthy households to spread some payments of their unrealized earnings over nine years, and for five years on new income in the future. In effect, the AP explained, the payments are an advance payment on tax liabilities they will owe when the investments are sold.

The proposal could meet resistance from moderate Democrats, including the senses. Joe Manchin of West Virginia and Krysten Sinema of Arizona, but it gives Democrats something to talk about as inflation hits a 40-year high. At the same time, for Republicans who oppose it, it creates a political handicap to appear on the side of the multi-billionaires.

In California, lawmakers were pushing for a tax on “extreme wealth” last month, which would increase household taxes by $50 million. The proposal would apply a 1% tax on those with a net worth of at least $50 million and a 1.5% tax on those worth more than $1 billion.

“There is a whole other category of wealth where you only own things and can get more wealth out of your existing wealth and we have seen how that can be evaded,” Assemblyman Alex Lee (D-San Jose) told the Los Angeles Times in February. “We want the obscene ultra-rich to pay their fair share.”

Last year, ProPublica released a bombshell report based on never-before-seen IRS files that showed multi-billionaires Jeff Bezos, Elon Musk, Mark Zuckerberg and Rupert Murdoch paid very little or sometimes nothing in income tax.

Here are 28 of California’s richest residents:

  1. #3: Mark Zuckerberg (37), $134.5 billion from Facebook, META; Lives in Palo Alto
  2. No. 5: Larry Page (48), $123 billion from Google; Lives in Palo Alto
  3. No. 6: Sergey Brin (48), $118.5 billion from Google; Lives in Atherton
  4. #29: Dustin Moskovitz (37), $24.1 billion from Facebook; Lives in San Francisco
  5. No. 30: Eric Schmidt (66), $23.9 billion from Google; Lives in Atherton
  6. #33: Laurene Powell Jobs and Family (57), $22.1 billion from Apple, Disney; Lives in Los Altos
  7. No. 34: Jensen Huang (58), $21.3 billion from semiconductors; Lives in San Jose
  8. #38: Robert Pera (43), $19 billion from wireless networking equipment; Lives in San Francisco
  9. No. 46: Donald Bren (89), $16.2 billion of Irvine Co. real estate; Lives in Newport Beach
  10. No. 51: John Doerr (70), $15.2 billion in venture capital; Lives in Woodside
  11. No. 51: Bobby Murphy (33), $15.2 billion from Snapchat; Lives in Venice
  12. #53: Jack Dorsey (44), $14.9 billion from Twitter, Square; Lives in San Francisco
  13. No. 54: Eric Yuan and his family (51), $14.5 billion from Zoom Video Communications; Lives in Santa Clara
  14. #55: Evan Spiegel (31), $13.8 billion from Snapchat; Lives in Los Angeles
  15. No. 57: Brian Chesky (40), $12.5 billion from Airbnb; Lives in San Francisco
  16. No. 60: Brian Armstrong (38), $11.5 billion from cryptocurrency; Lives in San Francisco
  17. No. 60: Charles Schwab (84), $11.5 billion from discount brokerage; Lives in Woodside
  18. No. 65: Jan Koum (45), $10.9 billion from WhatsApp; Lives in Atherton
  19. No. 66: Joe Gebbia (40), $10.8 billion from Airbnb; Lives in San Francisco
  20. #66: Gordon Moore (92), $10.8 billion from Intel; Lives in Woodside
  21. #71: David Geffen (78), $10.5 billion from movies, record companies; Lives in Beverly Hills
  22. No. 74: Marc Benioff (57), $10.2 billion in business software; Lives in San Francisco
  23. No. 75: Steven Rales (70), $10.1 billion from manufacturing; Lives in Santa Barbara
  24. #76: Nathan Blecharczyk (38), $10 billion from Airbnb; Lives in San Francisco
  25. No. 88: George Roberts (78), $9 billion in private equity; Lives in Atherton
  26. No. 89: Patrick Soon-Shiong (69), $8.9 billion from pharmaceuticals; Lives in Los Angeles
  27. No. 92: Vinod Khosla (66), 8.6 billion dollars in venture capital; Lives in the Portola Valley
  28. #98: Jack Dangermond (76), $8.4 billion from mapping software; Lives in Redlands

The Associated Press contributed reporting.

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