Here’s how Biden’s Build Back Better framework would tax the rich

The White House issued a framework for a $1.75 trillion social and climate spending bill on Thursday — and would finance more than half of it from tax reforms aimed at wealthy Americans.

The plan would raise revenue by levying a tax surcharge on those making more than $10 million a year, raising taxes for some high-income business owners and strengthening IRS tax enforcement, according to the outline.

The framework was the product of several months of negotiations between moderate and progressive Democrats. Together, proposals targeting wealthy taxpayers would raise about $1 trillion of the nearly $2 trillion of total revenue being raised. (The rest would come from new taxes on corporations and stock buybacks, for example.)

President Joe Biden said the legislation was fully paid for and would help reduce the federal budget deficit.

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“I don’t want to punish anyone’s success; I’m a capitalist,” President Biden said in a speech Thursday. “All I’m asking is, pay your fair share.”

Biden reiterated that households earning more than $400,000 a year wouldn’t “pay a penny more” in federal taxes and would likely get a tax cut from the proposal, via elements like the enhanced child tax credit, and reduced costs on child care and health care.

The framework omits specifics beyond high-level detail. But it seems to abandon many tax proposals issued last month by the House Ways and Means Committee, even while the overarching policy goal of targeting the wealthy is the same.

For example, the framework doesn’t raise the current top 37% income tax rate or 20% top rate on investment income (with the exception of multimillionaires subject to the proposed surtax). It also wouldn’t impose new required distributions from big retirement accounts or alter rules around estate taxes and trusts, for example.

“It’s far slimmed down,” said Kyle Pomerleau, a senior fellow at the American Enterprise Institute, a right-leaning think tank. “It forgoes a lot of things they’d proposed in the House bill.”

Of course, the proposal needs near-unanimous backing from Democrats in the House and Senate, given their razor-thin majorities, and it’s unclear whether it has the party’s full support.

Here are some of the major provisions in the Build Back Better framework.

The plan would impose a new surtax on the top 0.02% of Americans, according to the White House.

There would be a 5% surtax on adjusted gross income of more than $10 million, and an additional 3% (or, a total 8% surtax) on income of more than $25 million.

The surtax is estimated to raise $230 billion over 10 years.

“This is one of the…