On Monday, President Biden unveiled his new plan to Congress during his budget request which will severely increase revenue by implementing a minimum 20 percent tax on billionaires. Following criticism from the Democratic Senator, Senator Manchin could deal a fatal blow to Mr Biden being able to get his plan passed through Congress.
The Senator already scuppered President Biden’s previous schemes for fighting climate change and improving social care in the autumn.
Mr Manchin declared he would not vote on the plan which would impose a minimum income tax for the richest Americans worth over $100 million.
The tax scheme would tax the unrealized gains of American billionaires, that is, the value of their assets before they are sold, and the money is converted physically into cash.
Speaking to The Hill, Mr Manchin said: “You can’t tax something that’s not earned. Earned income is what we’re based on.
“There’s other ways to do it. Everybody has to pay their fair share.”
He added: “Everybody has to pay their fair share, that’s for sure. But unrealized gains is not the way to do it, as far as I’m concerned.”
Senate Republican Whip John Thune, a member of the Finance Committee, said: “It’s essentially taxing people before they actually get the income, and that seems like a really dangerous precedent in tax law because if you have a gain one year and then a huge loss the next year, how’s the government going to pay people back for their losses?”
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He said: “Here’s what they do. They go to their accountant. They tell their accountant, ‘Make sure I don’t make any income, any salary.’ And then they say, ‘Make sure I can buy, borrow and die.’ And nobody knew anything about that years ago, and now people are pretty up on it.”
Mr Wyden supported President Biden’s proposal, calling it “solid” and said that the tax plan would ensure the richest people in America pay a similar percentage to those in the middle classes in relation to their wealth.