Senate Finance Committee ranking member Ron WydenRonald (Ron) Lee WydenBiden comments add momentum to spending bill's climate measures These Senate seats are up for election in 2022 Democrats call on Biden administration to ease entry to US for at-risk Afghans MORE (D-Ore.) on Tuesday said that he will put forth a proposal to ensure that wealthy individuals are paying their "fair share" of taxes, amid a debate among Democrats about how best to levy taxes on the rich.
Wyden announced that he will put forward a white paper that calls for taxing the capital gains of wealthy individuals' investments annually, as opposed to when the investments are sold under current law. Such an approach is known as "mark-to-market."
Wyden would also tax the capital gains at the same rates as other income, while capital gains are currently taxed at lower rates than ordinary income.
“Everyone needs to pay their fair share and the best approach to achieving that goal is a mark-to-market system that would require the wealthy to pay taxes on their gains every year at the same rates all other income is taxed," Wyden said in a statement. "This eliminates serious loopholes that allow some to pay a lower rate than wage earners, to delay their taxes indefinitely, and in some cases, to avoid paying tax at all."
“Just increasing the top tax rates leaves loopholes in place that savvy accountants and lawyers exploit," he added. "In contrast, taxing the annual gains generated by wealth closes a host of loopholes while raising the sort of revenue needed to keep Social Security and Medicare secure for years to come."
Wyden's announcement comes as many Democrats in the presidential race have released proposals to boost taxes on the wealthy in an effort to reduce wealth inequality and raise revenue to pay for spending priorities. Sen. Elizabeth WarrenElizabeth WarrenArizona Democratic Party executive board censures Sinema Democrats call on Biden administration to ease entry to US for at-risk Afghans Biden stiff arms progressives on the Postal Service MORE (D-Mass.) has proposed a wealth tax, while several candidates, including Sen. Bernie SandersBernie SandersSunday shows - Russia standoff over Ukraine dominates Sanders says Biden can't count on him to support 'almost any' spending package compromise Sanders says Republicans are 'laughing all the way to Election Day' MORE (I-Vt.), have proposed expanding the estate tax.
Wyden is not running for president. However, if Democrats win the 2020 presidential election and take back control of the Senate, Wyden would likely become chairman of the Finance Committee and would play a key role in crafting tax legislation.