Bill Overview
Title: Billionaire Minimum Income Tax Act
Description: This bill imposes a minimum tax on individual taxpayers whose net worth for the taxable year exceeds $100 million. The tax is equal to 20% of the sum of a taxpayer's taxable income, plus net unrealized gains for the taxable year. The tax may not exceed 40% of the amount by which the taxpayer's net worth exceeds $100 million.
Sponsors: Rep. Cohen, Steve [D-TN-9]
Target Audience
Population: Individuals with net worth exceeding $100 million
Estimated Size: 5000
- The bill targets individual taxpayers with a net worth exceeding $100 million.
- Typically, individuals with at least $1 billion in net worth are commonly referred to as billionaires, although this bill impacts those at $100 million and above.
- Statistical sources like the Forbes Billionaires list indicate that there are around 2,600 billionaires worldwide.
- Considering billionaires and those likely in the $100 million to $1 billion range likely increases this target population substantially.
- It's hard to define an exact number for those who have just over $100 million net worth as global data is scarce for the $100M-$1B range, but the population is smaller compared to billionaires.
Reasoning
- The target population for this tax is wealthy individuals with net worths over $100 million, estimated to be around 5,000 in the U.S.
- The tax would directly impact these individuals by imposing a minimum tax rate on their income and unrealized gains, potentially influencing their financial strategies and overall wellbeing.
- For individuals outside this bracket, the policy might not have direct effects, but there might be indirect socioeconomic impacts or changes in perception towards wealth inequality.
- Budget limitations indicate the policy's focus is narrow and targeted, primarily burdening and transferring resources from a small segment of the population.
Simulated Interviews
Hedge Fund Manager (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- The tax would drastically change my investment strategies.
- It might discourage high-risk, high-reward investments which are essential to the finance industry.
- It could cause me to relocate to a more tax-friendly location eventually.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 5 | 8 |
| Year 5 | 5 | 8 |
| Year 10 | 4 | 8 |
| Year 20 | 3 | 8 |
Tech Entrepreneur (San Francisco, CA)
Age: 38 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I'm worried about the impact on my ability to reinvest in my companies.
- This tax might make it hard to scale up new ventures.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 8 | 9 |
| Year 3 | 7 | 9 |
| Year 5 | 6 | 9 |
| Year 10 | 6 | 9 |
| Year 20 | 6 | 9 |
Real Estate Developer (Dallas, TX)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- Ultimately, the tax won't affect my lifestyle drastically, but it will change the liquidity management strategy.
- I need to reassess portfolio turnover and cash flow.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Heir to Manufacturing Fortune (Chicago, IL)
Age: 55 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 8/20
Statement of Opinion:
- I might have to sell off some holdings to cover taxes.
- Questioning the fairness of taxing unrealized gains.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 4 | 6 |
| Year 5 | 4 | 6 |
| Year 10 | 3 | 6 |
| Year 20 | 3 | 6 |
Venture Capitalist (Miami, FL)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- This policy might slow funding rounds for tech startups.
- Could result in a more cautious approach to new investments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 8 |
Entertainment Mogul (Los Angeles, CA)
Age: 72 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- I already employ tax strategies to minimize burdens.
- This policy will demand smarter financial maneuvers, not impossible.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Philanthropist (Boston, MA)
Age: 65 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Philanthropic giving might need adjustment to account for the new tax.
- Focus remains on effective distribution of wealth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Tech Investor (Seattle, WA)
Age: 30 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- This will impact returns expected from tech startups.
- It could affect the overall growth strategy in tech investments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 8 |
Private Equity Fund Partner (Detroit, MI)
Age: 40 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I'm currently unaffected, but wary of potential expansions of such policies.
- Could impact approaches in managing funds in the future.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Oil and Gas Executive (Austin, TX)
Age: 58 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 12/20
Statement of Opinion:
- Tax might encourage earlier transitions to lower indirect tax liabilities.
- Possible shifts in future investments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 4 | 7 |
Cost Estimates
Year 1: $5000000000 (Low: $4000000000, High: $6000000000)
Year 2: $4500000000 (Low: $3500000000, High: $5500000000)
Year 3: $4000000000 (Low: $3000000000, High: $5000000000)
Year 5: $3000000000 (Low: $2000000000, High: $4000000000)
Year 10: $1500000000 (Low: $1000000000, High: $2000000000)
Year 100: $500000000 (Low: $250000000, High: $1000000000)
Key Considerations
- High compliance and enforcement costs due to complexities in accurately assessing net worth and unrealized gains.
- Potential for reduced foreign investments due to perceived increased tax burdens on U.S.-based individuals.
- Risk of capital flight or tax base erosion as individuals seek alternative domiciles.
- Strong potential for significant revenue generation depending on market conditions and successful reduction of tax avoidance.