![]() Congress rejected this. The other requires wealthy people to pay income taxes on their unrealized gains annually the way the rest of us pay taxes on our income each year. One is President Biden’s proposal to include wealthy people’s unrealized capital gains on their final tax return after they die, meaning this income would be taxed eventually. There are two ways to solve the problem with unrealized capital gains, and the framework does not include either of them. But these positive changes do not apply to unrealized capital gains, which account for most of the income of billionaires like Bezos and Musk, and that would not change under the framework. The framework includes a surtax on very high-income people, an important and needed change. Current law imposes a 3.8 percent tax on both the earned income and investment income of well-off people to fund health care, and the framework has helpful provisions to close loopholes that allow some to avoid these taxes. Even worse, if they hold onto their assets for the rest of their life, the unrealized gains will be exempt forever from the income tax, passed on tax-free to whomever they choose. ![]() Months ago, the world learned that they and other superwealthy people arrange their business affairs to ensure that most of their income takes the form of “unrealized” capital gains, which are not counted as income under current law. This means most of their income each year goes untaxed unless they sell their assets. The bad news is that some fundamental problems with our tax code would remain unaddressed.īillionaires like Jeff Bezos and Elon Musk will continue to pay no taxes on the vast majority of their income. The good news is that the plan would raise nearly $2 trillion over a decade from those who can afford to pay–the richest Americans and large, profitable corporations. ![]() The tax provisions in the Build Back Better framework released by the White House today include enormously helpful reforms but also some disappointments.
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