Biden is still undecided on wealth tax, Treasury Secretary Yellen says

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President Joe Biden hasn’t proposed a wealth tax and hasn’t yet decided whether or not to create one, but it is something the U.S. administration “can look at,” said Treasury Secretary Janet Yellen on Sunday.

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  • Sen. Elizabeth Warren (D., Mass.) two weeks ago revived one the key planks of her Democratic presidential primary platform and proposed legislation creating a 2% annual “multimilliionaire” tax on households’ net worth above $50 million, with a 1% surcharge above $1 billion.
  • During his campaign, Biden proposed higher taxes on corporate profits, capital gains and dividends, as well as the richest individuals, but didn’t endorse a wealth tax.
  • In her interview Sunday on ABC’s “Meet the Press,” Yellen acknowledged that “over time,” the administration would have to “be putting forth proposals to get deficits under control.”
  • She also noted that due to historically low interest rates, interest payments on government debt “relative to the size of the economy have remained quite low.” 

The outlook: Yellen has never hidden in the past her skepticism toward a wealth tax, if only because of its “very difficult implementation problems, she said in an interview last month. But pressure from the Democratic Party’s left could at least force the Biden administration to formally review the idea.

Yellen insisted that the problem of how to finance the $1.9 trillion Biden stimulus isn’t a short-term one. But she also suggested that taxes will have to be raised at some point to finance the big public investment effort the administration is planning.

Read: Biden stimulus will give a major boost to the global recovery, OECD says

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