Democrats at odds over 'billionaires tax' to fund sweeping Biden agenda

WASHINGTON (Reuters) – Senior Democrats in the US Congress were at odds on Wednesday over a proposal to tax billionaires' assets to help pay for President Joe Biden's social and climate-change agenda, leaving it unclear if the idea had enough support to become law.

The Senate's top tax writer, Finance Committee Chairman Ron Wyden, unveiled the idea early on Wednesday, but by afternoon his House of Representatives counterpart, Ways and Means Committee Chairman Richard Neal, said the idea appeared to be too complex to succeed.

Biden's Democrats are struggling to reach consensus on the scope of a pair of bills worth about $3 trillion to rebuild the nation's infrastructure, boost social spending and fight climate change. With the narrowest of margins in Congress, and unified Republican opposition, they need near 100% agreement within the caucus to pass anything.

Biden and Democratic congressional leaders have been scaling back their ambitions in order to keep skeptical centrists on board. Several media outlets reported that they dropped a provision on Wednesday that would have provided up to 12 weeks of paid family leave.

Aides in Congress said the billionaires tax, affecting roughly 700 taxpayers with over $1 billion in assets or $100 million in annual income for three consecutive years, would impose a 23.8% tax rate for long-term capital gains on tradable assets, whether or not they have been sold. It would also allow taxpayers to take deductions for losses on assets.

Neal, along with other Democrats had backed Biden's original proposal, which would raise tax rates on companies and the wealthy, but that idea faces an uphill fight in the Senate.

Referring to the billionaires tax, Neal said: "It will be very difficult because of its complexity."

He added that Democrats are discussing imposing a 3% surtax on taxpayers earning more than $10 million.

Senator Bernie Sanders, a leading progressive, said the billionaires tax was a "step in the right direction" but not nearly enough. "Every sensible revenue option seems to be destroyed," he told reporters. Sanders met with Biden on Wednesday, a White House aide said.

The billionaires tax plan was put forth after Senate moderates voiced opposition to the idea of raising corporate tax rates.

"The president supports the billionaire tax," said White House spokesperson Jen Psaki. "He looks forward to working with Congress and Chairman Wyden to make sure the highest-income Americans pay their fair share."

Two other revenue proposals - a 15% corporate minimum tax and tougher enforcement of existing tax laws - also enjoy backing from the White House and congressional Democrats.