Biden to propose 25% minimum tax on US billionaires

US President Joe Biden will call on Congress to impose a 25% minimum tax on billionaires as part of a series of proposed tax hikes on wealthy individuals and corporations.

Biden’s proposed spending plan would also nearly double the capital gains tax for investment from 20% to 39.6%, and lift income levies on corporations and wealthy Americans, Bloomberg reports.

US President will unveil his budget plan on Thursday amid sharp divisions between Republicans and Democrats on taxes, spending and debt reduction, kicking off what are likely to be fraught negotiations between the White House and a divided Congress.

The spending plan comes as Republicans and the White House are locked in a standoff over raising the debt ceiling, the total amount of money the federal government is allowed to borrow, amid a $31 trillion national debt.

Republicans, led by US House of Representatives Speaker Kevin McCarthy, have argued the ceiling should not be raised without significant spending cuts and have dismissed calls for higher taxes.

Biden has said his plan will cut the deficit by nearly $3 trillion over 10 years, mostly through tax increases. Republicans hold a majority in the House, with the Democrats controlling the Senate.

During his State of the Union address in February, Biden called on Congress to support higher taxes on the wealthy and “reward work, not just wealth”.

The US president has insisted that his proposed tax hikes will only affect a small percentage of Americans, telling an audience in Virginia last week that those with an annual salary of less than $400,000 “will not pay an additional single penny in any tax”.

Biden last year proposed a billionaire minimum income tax to ensure households worth more than $100m pay at least 20% in taxes on both income and unrealised gains from unsold investments.