The president laid out the tax hikes as part of his $5.8 trillion budget blueprint for federal spending in fiscal 2023, which begins in October. Under his proposal, taxes would rise by $2.5 trillion, marking the largest increase in history in dollar terms. The deficit would be $1.15 trillion.
The higher taxes would largely be borne by Wall Street and the top sliver of U.S. households, in the form of a steeper corporate rate, a modified wealth tax and a global minimum tax.
"We are reducing the Trump deficits and returning our fiscal house to order," Biden said at the White House on Monday, referring to the widening spending gap under former President Donald Trump. He said the budget "makes prudent investment and economic growth, a more equitable economy, while making sure corporations and the very wealthy pay their fair share."
The taxes outlined on Monday include a minimum 20% tax on the incomes of U.S. households worth $100 million or more – similar to other proposals that Democrats floated last year to pay for Biden's massive spending plan. But those pitches fell to the wayside after talks with West Virginia Sen. Joe Manchin collapsed.
The so-called "Billionaire Minimum Income Tax" would raise $361 billion in revenue over 10 years and apply to the top 0.01% of households, or about 20,000 Americans. The White House said that roughly half the revenue stems from the country's 700 billionaires.
Under the proposal, the wealthiest Americans would be required to pay a tax rate of at least 20% on their full income, or the combination of wage income and whatever they made in unrealized gains. If a billionaire is not paying 20% on their income, they will owe a "top-up payment" that makes up the difference to meet the new minimum.
Households that are paying 20% will not be required to pay an additional tax.
Because many of the ultra-rich derive their vast wealth from the soaring value of assets like stock and property – which are not considered to be taxable income unless that individual sells – they are able to legally store their fortunes and reduce their tax liability. Under current law, a gain is only taxed if and when the owner sells the asset.
"As a result, this new minimum tax will eliminate the ability for the unrealized income of ultra-high-net-worth households to go untaxed for decades or generations," the White House said in the budget proposal.
Although Biden did not endorse a billionaires' tax during the 2020 presidential campaign, he threw his support behind the idea this past year after Manchin killed a different spending plan that included tax hikes on well-off corporations and Americans earning more than $400,000.
It remains unclear whether congressional Democrats will approve of Biden's plan to tax billionaires and ultra-millionaires.
Manchin called a different billionaires' tax proposal from Sen. Ron Wyden, D-Ore., "convoluted," but has since suggested that he could support some type of levy targeting the richest Americans.
Tax experts are also skeptical about the feasibility of the proposal.
John Gimigliano, the head of federal legislative regulatory services at KPMG, told FOX Business the proposed billionaire tax is "likely to be a slow burn."
"It’s going to take substantial time for Congress to digest this proposal both intellectually and politically," he said. "It’s very difficult to find instances in the Internal Revenue Code in which Congress has chosen to tax unrealized gains – it’s almost taboo."
Biden also proposed raising the corporate tax rate to 28% from 21% as part of his budget request and pitched a global minimum tax that's designed to crack down on offshore tax havens. Arizona Sen. Kyrsten Sinema has previously said that she will not support a corporate tax increase.
Under his envisioned budget, the nation's deficit would shrink by more than $1 trillion over the next decade. In fiscal year 2021, the federal deficit reached nearly $2.8 trillion, according to the Congressional Budget Office, while the national debt ballooned past $30 trillion.