How would Biden’s proposed billionaire income tax work?

FILE - President Joe Biden sits in the Oval Office of the White House, on March 4, 2022, in Washington. A "Billionaire Minimum Income Tax" included in President Joe Biden's proposed budget for the next fiscal year is part of the administration's larger effort to reduce the federal deficit over the next decade. The White House says the proposal would eliminate the "sheltering of income for decades or generations." (AP Photo/Patrick Semansky, File) FILE - President Joe Biden sits in the Oval Office of the White House, on March 4, 2022, in Washington. A "Billionaire Minimum Income Tax" included in President Joe Biden's proposed budget for the next fiscal year is part of the administration's larger effort to reduce the federal deficit over the next decade. The White House says the proposal would eliminate the "sheltering of income for decades or generations." (AP Photo/Patrick Semansky, File)

By FATIMA HUSSEIN / Associated Press March 28, 2022 4 min read

WASHINGTON (AP) – A “Billionaire Minimum Income Tax” is included in President Joe Biden’s fiscal year 2023 budget proposal – part of the administration’s effort to reduce the federal deficit over the next decade and fund new spending. The proposal “eliminates the inefficient sheltering of income for decades or generations,” the White House says.

During a press conference highlighting the budget on Monday, Biden said one-hundredth of 1% of Americans would be subject to the tax. “The billionaire minimum tax is fair, and it raises $360 billion that can be used to lower costs for families and cut the deficit,” he said.

Whether Congress will approve is a major question as the administration outlines its hope to tax the nation’s highest earners.

Here’s how it would work:

HOW WOULD THE TAX APPLY?