President Joe Biden is expected to propose a new “Billionaire Minimum Income Tax” (BMIT) at a minimum rate of 20% on U.S. households worth more than $100 million. Over half the revenue could come from those worth more than $1 billion.
How many billionaires are in the United States? How did their wealth change in 2021?
In 2021, of the 2,755 billionaires in the world, 724 of them were in the United States.
The wealth of U.S. billionaires in 2021 was $4.6 trillion. The wealth of the world’s billionaires was $8 trillion in 2020, and it increased to $13.1 trillion in 2021—an increase of almost 64 percent. Applying the same percentage increase to the wealth of U.S. billionaires, their wealth in 2020 was $2.8 trillion, so their wealth increased by $1.8 trillion in 2021.
What was the increase in U.S. billionaire wealth in 2021 as a percentage of GDP?
In 2021, U.S. billionaire wealth increased by $1.8 trillion and GDP was $23 trillion, so billionaire wealth increased by 7.8 percent of GDP.
What was the increase in the average U.S. billionaire wealth in 2021?
In 2021, the wealth of 724 billionaires increased by $1.8 trillion, so the wealth of the average billionaire increased by $2.5 billion.
What is the distinction between income and wealth?
A household’s income is the amount that it receives for its labor (wages), capital (interest), and entrepreneurship (profit) during a given period. A household’s wealth is the value of the things that it owns at a point in time. The change in a household’s wealth arising from changes in the prices of assets—called capital gains—are part of its income from capital.
Was the increase in billionaire wealth in 2021 income?
No, the increase in billionaire wealth in 2021 was not income.
The billionaires’ capital gains were unrealized. If the billionaires had tried to sell their assets and live in lavish luxury, the prices of their assets most likely would have fallen. Only realized capital gains are income and they cannot be measured by looking at the change in measured wealth.
Is President Biden’s BMIT an income tax or a wealth tax?
President Biden’s BMIT is an income tax. It taxes income at a minimum 20 percent but with unrealized capital gains counted as income.
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