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    How Wall Street Escaped the Crypto Meltdown

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    Last November, in the midst of an exuberant cryptocurrency market, analysts at BNP Paribas, a French bank with a Wall Street presence, pulled together a list of 50 stocks they thought were overpriced — including many with strong links to digital assets.They nicknamed this collection the “cappuccino basket,” a nod to the frothiness of the stocks. The bank then spun those stocks into a product that essentially gave its biggest clients — pension funds, hedge funds, the managers of multibillion-dollar family fortunes and other sophisticated investors — an opportunity to bet that the assets would eventually crash.In the past month, as the froth around Bitcoin and other digital currencies dissipated, taking down some cryptocurrency companies that had sprung up to aid in their trading, the value of the cappuccino basket shrank by half.Wall Street clients of BNP who bet that would happen are sitting pretty. Those on the other side of the trade — the small investors who loaded up on overpriced crypto assets and stocks during a retail trading boom — are reeling.“The moves in crypto were coincident with retail money flooding into U.S. equities and equity options,” said Greg Boutle, who heads BNP’s U.S. equities and derivatives strategy group, which put together the trade. “There’s a big bifurcation between retail positioning and institutional positioning.” He declined to name the specific stocks that BNP clients got to bet against.In the great cryptocurrency blood bath of 2022, Wall Street is winning.“The moves in crypto were coincident with retail money flooding into U.S. equities and equity options,” said Greg Boutle of BNP Paribas.Benoit Tessier/ReutersIt’s not that financial giants didn’t want to be part of the fun. But Wall Street banks have been forced to sit it out — or, like BNP, approach crypto with ingenuity — partly because of regulatory guardrails put in place after the 2008 financial crisis. At the same time, big money managers applied sophisticated strategies to limit their direct exposure to cryptocurrencies because they recognized the risks. So when the market crashed, they contained their losses.“You hear of the stories of institutional investors dipping their toes, but it’s a very small part of their portfolios,” said Reena Aggarwal, a finance professor at Georgetown University and the director of its Psaros Center for Financial Markets and Policy.Unlike their fates in the financial crisis, when the souring of subprime mortgages backed by complex securities took down both banks and regular people, leading to a recession, the fortunes of Wall Street and Main Street have diverged more fully this time. (Bailouts eventually saved the banks last time.) Collapsing digital asset prices and struggling crypto start-ups didn’t contribute much to the recent convulsions in financial markets, and the risk of contagion is low.But if the crypto meltdown has been a footnote on Wall Street, it is a bruising event for many individual investors who poured their cash into the cryptocurrency market.“I really do worry about the retail investors who had very little funds to invest,” Ms. Aggarwal said. “They are getting clobbered.”Lured by the promise of quick returns, astronomical wealth and an industry that isn’t controlled by the financial establishment, many retail investors bought newly created digital currencies or stakes in funds that held these assets. Many were first-time traders who, stuck at home during the pandemic, also dived into meme stocks like GameStop and AMC Entertainment.They were bombarded by ads from cryptocurrency start-ups, like apps that promised investors outsize returns on their crypto holdings or funds that gave them exposure to Bitcoin. Sometimes, these investors made investment decisions that weren’t tied to value, egging on one another using online discussion platforms like Reddit.Spurred partly by the frenzy, the cryptocurrency industry blossomed quickly. At its height, the market for digital assets reached $3 trillion — a large number, although no bigger than JPMorgan Chase’s balance sheet. It sat outside the traditional financial system, an alternative space with little regulation and an anything-goes mentality.The meltdown began in May when TerraUSD, a cryptocurrency that was supposed to be pegged to the dollar, began to sink, dragged down by the collapse of another currency, Luna, to which it was algorithmically linked. The death spiral of the two coins tanked the broader digital asset market.Bitcoin, worth over $47,000 in March, fell to $19,000 on June 18. Five days earlier, a cryptocurrency lender called Celsius Networks that offered high-yield crypto savings accounts, halted withdrawals.Martin Robert has two Bitcoins stuck on Celsius Networks and is afraid he will never see them again. He had planned to cash the coins in to pay down debt.Bridget Bennett for The New York TimesThe fortunes of many small investors also began tanking.On the day that Celsius froze withdrawals, Martin Robert, a day trader in Henderson, Nev., was preparing to celebrate his 31st birthday. He had promised his wife that he would take some time off from watching the markets. Then he saw the news.“I couldn’t take my coins out fast enough,” Mr. Robert said. “We’re being held hostage.”Mr. Robert has two Bitcoins stuck on the Celsius network and is afraid he’ll never see them again. Before their price plunged, he intended to cash the Bitcoins out to pay down around $30,000 in credit card debt. He still believes that digital assets are the future, but he said some regulation was necessary to protect investors.“Pandora’s box is opened — you can’t close it,” Mr. Robert said.Beth Wheatcraft, a 35-year-old mother of three in Saginaw, Mich., who uses astrology to guide her investing decisions, said trading in crypto required a “stomach of steel.” Her digital assets are mostly in Bitcoin, Ether and Litecoin — as well as some Dogecoins that she can’t recover because they are stored on a computer with a corrupted hard drive.Ms. Wheatcraft stayed away from Celsius and other firms offering similar interest-bearing accounts, saying she saw red flags.Beth Wheatcraft, a mother of three, said trading in crypto required a “stomach of steel.”Sarah Rice for The New York TimesThe Bitcoin Trust, a fund popular with small investors, is also experiencing turmoil. Grayscale, the cryptocurrency investment firm behind the fund, pitched it as a way to invest in crypto without the risks because it alleviated the need for investors to buy Bitcoin themselves.But the fund’s structure doesn’t allow for new shares to be created or eliminated quickly enough to keep up with changes in investor demand. This became a problem when the price of Bitcoin began to sink rapidly. Investors struggling to get out drove the fund’s share price well below the price of Bitcoin.In October, Grayscale asked regulators for permission to transform the fund into an exchange-traded fund, which would make trading easier and thus align its shares more closely with the price of Bitcoin. Last Wednesday, the Securities and Exchange Commission denied the request. Grayscale quickly filed a petition challenging the decision.When the crypto market was rollicking, Wall Street banks sought ways to participate, but regulators wouldn’t allow it. Last year, the Basel Committee on Banking Supervision, which helps set capital requirements for big banks around the world, proposed giving digital tokens like Bitcoin and Ether the highest possible risk weighting. So if banks wanted to put those coins on their balance sheets, they would have to hold at least the equivalent value in cash to offset the risk.U.S. bank regulators have also warned banks to stay away from activities that would land cryptocurrencies on their balance sheets. That meant no loans collateralized by Bitcoin or other digital tokens; no market making services where banks took on the risk of ensuring that a particular market remained liquid enough for trading; and no prime brokerage services, where banks help the trading of hedge funds and other large investors, which also involves taking on risk for every trade.Banks thus ended up offering clients limited products related to crypto, allowing them an entree into this emerging world without running afoul of regulators.Goldman Sachs put Bitcoin prices on its client portals so clients could see the prices move even though they couldn’t use the bank’s services to trade them. Both Goldman and Morgan Stanley began offering some of their wealthiest individual clients the chance to buy shares of funds linked to digital assets rather than giving them ways to buy tokens directly.The headquarters of Goldman Sachs. Only a small subset of the company’s clients qualified to buy investments linked to crypto through the bank.An Rong Xu for The New York TimesOnly a small subset of Goldman’s clients qualified to buy investments linked to crypto through the bank, said Mary Athridge, a Goldman Sachs spokeswoman. Clients had to go through a “live training” session and attest to having received warnings from Goldman about the riskiness of the assets. Only then were they allowed to put money into “third party funds” that the bank had examined first.Morgan Stanley clients couldn’t put more than 2.5 percent of their total net worth into such investments, and investors could invest in only two crypto funds — including the Galaxy Bitcoin Fund — run by outside managers with traditional banking backgrounds.Still, those managers may not have escaped the crypto crash. Mike Novogratz, the chief executive of Galaxy Digital and a former Goldman banker and investor, told New York magazine last month that he had taken on too much risk. Galaxy Digital Asset Management’s total assets under management, which peaked at nearly $3.5 billion in November, fell to around $1.4 billion by the end of May, according to a recent disclosure by the firm. Had Galaxy not sold a major chunk of Luna three months before it collapsed, Mr. Novogratz would have been in worse shape.But while Mr. Novogratz, a billionaire, and the wealthy bank clients can easily survive their losses or were saved by strict regulations, retail investors had no such safeguards.Jacob Willette, a 40-year-old man in Mesa, Ariz. who works as a DoorDash delivery driver, stored his entire life savings in an account with Celsius that promised high returns. At its peak, the stored value was $120,000, Mr. Willette said.He planned to use the money to buy a house. When crypto prices started to slide, Mr. Willette looked for reassurance from Celsius executives that his money was safe. But all he found online were evasive answers from company executives as the platform struggled, eventually freezing more than $8 billion in deposits.Celsius representatives did not respond to requests for comment.“I trusted these people,” Mr. Willette said. “I just don’t see how what they did is not illegal.” More

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    Biden to Include Minimum Tax on Billionaires in Budget Proposal

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    The tax would require that American households worth more than $100 million pay a rate of at least 20 percent on their full income, as well as unrealized gains in the value of liquid assets like stocks.WASHINGTON — The White House will ask Congress on Monday to pass a new minimum tax on billionaires as part of a budget proposal intended to revitalize President Biden’s domestic agenda and reduce the deficit.The tax would require that American households worth more than $100 million pay a rate of at least 20 percent on their full income, as well as unrealized gains in the value of their liquid assets, such as stocks, bonds and cash, which can accumulate value for years but are taxed only when they are sold.Mr. Biden’s proposal to impose a tax on billionaires is the first time he has explicitly called for a wealth tax. While many in his party have advocated taxes that target an individual’s wealth — not just income — Mr. Biden has largely steered clear of such proposals in favor of increasing the top marginal income tax rate, imposing a higher tax on capital gains and estates, and raising taxes on corporations.The “Billionaire Minimum Income Tax” would apply only to the top one-hundredth of 1 percent of American households, and over half of the revenue would come from those worth more than $1 billion. Those already paying more than 20 percent would not owe any additional taxes, although those paying below that level would have to pay the difference between their current tax rate and the new 20 percent rate.The payments of Mr. Biden’s minimum tax would also count toward the tax that billionaires would eventually need to pay on unrealized income from assets that are taxed only when they are sold for a profit.The tax proposal will be part of the Biden administration’s budget request for the next fiscal year, which the White House plans to release on Monday. In a document outlining the minimum tax, the White House called it “a prepayment of tax obligations these households will owe when they later realize their gains.”“This approach means that the very wealthiest Americans pay taxes as they go, just like everyone else,” the document said.As the administration grapples with worries over rising inflation, the White House also released a separate document on Saturday saying that Mr. Biden’s budget proposal would cut federal deficits by a total of more than $1 trillion over the next decade.The idea of imposing a wealth tax has gained traction since Mr. Biden was elected as Democrats have looked for ways to fund their sweeping climate and social policy agenda and ensure that the wealthiest Americans are paying their fair share.Senator Elizabeth Warren, Democrat of Massachusetts, and Senator Ron Wyden, Democrat of Oregon and the chairman of the Finance Committee, released separate proposals last year that would tax the wealthiest, albeit in different ways. Ms. Warren had championed the idea of a wealth tax in her unsuccessful presidential campaign.The decision by the administration to call for a wealth tax also reflects political realities over how to finance Mr. Biden’s economic agenda.Moderate Democrats, including Senator Kyrsten Sinema of Arizona, have balked at raising the corporate tax rate or lifting the top marginal income tax rate to 39.6 percent from 37 percent, leaving the party with few options to raise revenue.Still, Senator Joe Manchin III, Democrat of West Virginia, slammed the idea of taxing billionaires after Mr. Wyden’s proposal to do so was released, although Mr. Manchin has since suggested he could support some type of billionaires’ tax.Legal questions about such a tax also abound, particularly whether a tax on wealth — rather than income — is constitutional. If Congress approves a wealth tax, there has been speculation that wealthy Americans could mount a legal challenge to the effort. More

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    Democrats Push for Agreement on Tax Deduction That Benefits the Rich

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    Lawmakers are coalescing around a deal to suspend a $10,000 cap on state and local tax deductions that was imposed during the Trump administration.WASHINGTON — Democrats were readying an agreement on Tuesday that would repeal a cap on the amount of state and local taxes that homeowners can deduct as part of a broader $1.85 trillion spending bill, a move that could amount to a significant tax cut for wealthy Americans in liberal states.But some liberals quickly balked at the emerging agreement, which would suspend a $10,000 cap on the so-called SALT deduction for five years, removing a limit that Republicans included in their 2017 tax package as a way to pay for cuts for corporations and the rich. The suspension would kick in for deductions related to property taxes and state and local income taxes accrued in 2021 and would run through 2025.If it passes, the deal would be a major concession to a handful of Democrats from high-income states like New York and New Jersey who have insisted on lifting the cap, in order to win their votes for President Biden’s social policy and climate change package.But liberal Democrats have scoffed at the push to include the costly proposal in the domestic policy package, particularly as party leaders have curtailed or eliminated other spending priorities as they pare down a $3.5 trillion blueprint to appease moderate and conservative-leaning Democrats.Senator Bernie Sanders of Vermont, the chairman of the Budget Committee, blasted the repeal on Tuesday as a giveaway to the rich that went against the Democrats’ priorities.“I think there is a compromise to be reached here, a middle ground, which says that for families earning less than $400,000, they can take a complete exemption, but not families earning more than that,” said Mr. Sanders, who had released a blistering statement criticizing the agreement. “What exists is unacceptable, and one way or another it will be dealt with.”It remains unclear whether the agreement would apply broadly or if Democrats planned to impose an income cap to prevent the wealthiest Americans from receiving what amounts to a tax cut.A straight repeal of the cap for every household that claims the deduction would siphon huge amounts of revenue from the federal government: about $90 billion per year, according to budget experts.To get around that, the five-year suspension assumes that the cap is reinstated in 2026 for another five years, allowing Democrats to use a budget sleight of hand to show its removal as revenue neutral in the traditional 10-year window that lawmakers look to when considering a bill’s impact on the federal deficit.Three people with knowledge of the emerging agreement described it on the condition of anonymity and cautioned that discussions were continuing. Details of the talks were first reported by Punchbowl News.With Republicans opposed to Mr. Biden’s domestic policy plan, Democrats must win the support of all 50 senators who caucus with the party and all but three House lawmakers for the plan to become law. That effort is further complicated because Democrats are using an arcane process known as budget reconciliation, which shields fiscal legislation from the 60-vote filibuster threshold in the Senate.Those restrictions mean that any lawmaker, particularly in the Senate, could effectively tank the legislation over his or her priorities, including insisting that the bill repeal SALT. Democrats from the high-income states that have been most affected by the limit have spent the past five years searching for an opportunity to roll it back for their constituents, despite complaints that it would largely benefit the wealthy.House Democrats including Representatives Tom Suozzi of New York, Mikie Sherrill of New Jersey and Josh Gottheimer of New Jersey have made clear that they will not support the broader spending package without a SALT repeal. Mr. Gottheimer wore a large button emblazoned with the words “no SALT, no dice” to votes on Capitol Hill on Tuesday. Senator Chuck Schumer of New York, the majority leader, has also voiced support for getting rid of the cap.“We’ve been fighting for this for years,” Mr. Gottheimer said on Tuesday, adding that reinstating the full deduction would amount to giving “tax relief to families that deserve it and who got hosed in 2017.”Delaying the cap for five years in a 10-year window could effectively allow lawmakers to claim that the proposal would not have an impact on the package’s cost. Yet some Democrats appeared confident that lawmakers would act again in five years to prevent the cap from going back into effect.“It’ll be pretty clear when they get tax relief, it’s going to be hard to take that back,” Mr. Gottheimer said, referring to families in his district.The SALT limit resulted in tax increases for wealthier Americans beginning in 2018, particularly higher earners from high-tax states, and helped Democrats capture some House seats that Republicans previously held in New Jersey, California and elsewhere.The deduction is largely used by wealthy homeowners who itemize their deductions and live in states and cities with high taxes, which tend to be led by Democrats. Democrats accused Republicans of using the cap to pay for other tax cuts for the rich and to penalize liberal states.“My guess is the majority of Americans with a net worth of $50 to $300 million would get a tax cut under the Build Back Better plan with a full repeal of SALT,” Jason Furman, an economist at Harvard who was the chairman of the White House Council of Economic Advisers under President Barack Obama, said on Twitter on Tuesday. “The bill would do more for the super-rich than it does for climate change, childcare or preschool. That’s obscene.”But several lawmakers in the New York and New Jersey delegations have warned that their votes for the domestic policy package hinged on the inclusion of the provision, and Democrats have haggled for months over a possible solution.“We’re still going at it over it,” said Representative Richard E. Neal of Massachusetts, the Democratic chairman of the Ways and Means Committee, who joked on Tuesday that he had earned “a Ph.D. in the SALT deduction because it’s been argued from every perspective I can think of.”The Committee for a Responsible Federal Budget described the repeal of the SALT cap as a “regressive” tax cut, estimating that it would cost $90 billion a year in lost government revenue. The wealthiest would make out the best, with a SALT cap repeal distributing more than $300,000 per household in the top 0.1 percent of earners and only $40 for a middle-income family over the first two years.“With the SALT cap repealed and current tax rates retained, in fact, the reconciliation package might actually offer a net tax cut for most high-income households,” the group said.The right-leaning Tax Foundation estimated that repealing the cap would increase after-tax income of the top 1 percent of earners by 2.8 percent, while the bottom 80 percent would get minimal benefit.Republicans seized on the agreement on Tuesday, accusing Democrats of hypocrisy for backing an “anti-progressive” handout.“First Democrats cut out paid leave,” J.P. Freire, a spokesman for Republicans on the House Ways and Means Committee, said on Twitter. “Now they’re shoveling money to the rich.” More

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    How $2 Trillion in Tax Increases in Biden's Bill Target Companies and the Rich

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    The proposal to fund the president’s sprawling spending plan mostly turns up the dial on more conventional tax policies, while trying to curb maneuvers that allow tax avoidance.WASHINGTON — President Biden’s new plan to pay for his climate change and social policy package includes nearly $2 trillion in tax increases on corporations and the rich. But many of the more contentious and untested proposals that Democrats have been considering in recent weeks were left on the cutting-room floor.The latest proposal reflects the reality that moderate Democrats are unwilling to back certain ideas aimed at raising money, including taxing the unrealized capital gains of billionaires and giving the Internal Revenue Service more insight into the finances of taxpayers. Ultimately, the package of tax increases mostly turns up the dial on more conventional tax policies, while adding some new wrinkles to curb maneuvers that allow tax avoidance.“I think in terms of who they’re targeting, they did decide to target the larger population of very rich people and not just get the money from a very small group of superrich people,” said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center.Here’s a look at what’s in the new tax plan:Taxing the rich.Instead of a wealth tax or a special tax on billionaires, Mr. Biden rolled out a new “surtax” on income for multimillionaires and billionaires. It would effectively raise the top tax rate on ordinary income to 45 percent for the highest earners.Those with adjusted gross income of more than $10 million would face an additional 5 percent tax on top of the 37 percent marginal tax rate they already pay. Those making more than $25 million would face an extra 3 percent surtax.The Biden administration estimates that these tax increases would hit the top .02 percent of taxpayers and raise $230 billion of tax revenue over a decade.The plan also aims to ensure that people making more than $400,000 are not able to use loopholes to avoid paying a 3.8 percent Medicare tax. The White House estimates that provision alone will generate $250 billion in tax revenue over the next 10 years.Making corporations pay more.Borrowing a page from his campaign playbook, Mr. Biden wants to impose a 15 percent minimum tax on profitable companies that have little to no federal tax liability. Many profitable companies are able to reduce or eliminate their tax liability through the use of tax credits, deductions and previous losses that can carry over. The new tax would apply to companies with more than $1 billion in so-called book income — profits that firms report to their shareholders but not to the I.R.S.The plan is meant to ensure that the approximately 200 companies that pay no corporate income tax will have to pay some money to the federal government.The White House estimates the provision, which was also included in a plan presented by Senate Democrats, will raise an additional $325 billion in tax revenue over a decade.Chye-Ching Huang, the executive director of the Tax Law Center at New York University, said on Thursday that the proposal could mean that financial statements where book income is reported could become the new “locus for tax avoidance.”A separate proposal would also enact a 1 percent surcharge on corporate stock buybacks. Buybacks have surged along with the stock market, with cash-rich firms like Apple, JPMorgan Chase and Exxon spending billions of dollars each year to buy back, then retire, shares in their own companies. That can help drive up the company’s stock price, enriching both shareholders and corporate executives whose compensation is often tied to their firm’s stock performance.The provision is projected to raise $125 billion over 10 years.Ending the tax race to the bottom.Mr. Biden’s framework would raise the tax that companies pay on foreign earnings to 15 percent, putting the United States in line with a global minimum tax that is being completed at the Group of 20 summit in Rome this week.The Biden administration initially wanted to double the current rate to 21 percent from 10.5 percent. In settling on 15 percent, the U.S. rate would match what was agreed to by the 136 countries participating in the global deal and could blunt criticism that American companies will face a competitive disadvantage.The global agreement is meant to end corporate tax havens and stop what Treasury Secretary Janet L. Yellen describes as the “race to the bottom” of declining corporate tax rates around the world.To deter companies from finding ways to avoid the tax, the plan would impose a penalty rate on foreign corporations based in countries that are not part of the agreement.The Biden administration projects the international plans would raise $350 billion over a decade.Narrowing the tax gap.White House and Treasury Department officials have spent months pushing a proposal to narrow the $7 trillion gap in taxes that are owed by individuals and businesses but not collected. The administration initially wanted to invest $80 billion in additional enforcement staffing at the I.R.S. and require banks to hand over more information about the finances of their customers.Under the new proposal, the I.R.S. would get more money to ramp up audits of people making more than $400,000. However, the new bank reporting proposal — which the Treasury has called critical to its ability to hunt down hidden revenue — was conspicuously absent. A lobbying campaign from banks prompted huge blowback from lawmakers, including Senator Joe Manchin III, a West Virginia Democrat whose vote is critical to passing the overall package.Treasury officials and a group of Senate Democrats are continuing to negotiate with Mr. Manchin on narrowing the proposal in a way that he could support.As it stands, the plan to bolster I.R.S. enforcement is projected to raise $400 billion over a decade, down from the $700 billion in the original proposal.Reducing the deficit, maybe.Mr. Biden said on Thursday that his plans were “fiscally responsible” and claimed that the proposals, if enacted, would reduce the country’s budget deficit.The $2 trillion of proposed tax increases would more than offset the $1.85 trillion in spending on housing, child care and climate initiatives. However, nonpartisan scorekeepers such as the Congressional Budget Office have in the past offered less rosy projections of what Biden administration proposals might actually raise in revenue.Additional I.R.S. enforcement personnel will take years to get up to speed, and audits could be less effective without the additional bank information the Treasury Department is seeking.Some Democratic lawmakers are also still fighting for the inclusion of provisions that could actually cost money, including a partial or temporary restoration of SALT, the state and local tax deduction that Republicans capped in 2017. Last-minute additions such as that could add to the cost of the overall package. More

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    In Push to Tax the Rich, White House Spotlights Billionaires’ Tax Rates

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    A White House analysis using an unconventional methodology says the wealthiest Americans pay far less in taxes than others.WASHINGTON — President Biden is leaning into his push to increase taxes on the rich as he seeks to unify Democrats in the House and Senate behind a $3.5 trillion bill that would expand federal efforts to fight climate change, reduce the cost of child care, expand educational access, reduce poverty and more.“I’m sick and tired of the super-wealthy and giant corporations not paying their fair share in taxes,” Mr. Biden wrote on Twitter on Wednesday, amplifying an argument that Democratic strategists believe will help sell his economic agenda to the public and potentially lift the party’s candidates in midterm elections. “It’s time for it to change.”To buttress that argument, White House economists published on Thursday a new analysis that seeks to show a gap between the tax rate that everyday Americans face and what the richest owe on their vast holdings.The analysis suggests that the wealthiest 400 households in America — those with net worth ranging between $2.1 billion and $160 billion — pay an effective federal income tax rate of just over 8 percent per year on average. The White House is basing that tax rate on calculations using data on high earners’ income, wealth and taxes paid from the Internal Revenue Service and the Federal Reserve’s Survey of Consumer Finances.The analysis, from researchers at the Office of Management and Budget and the Council of Economic Advisers, is an attempt to bolster Mr. Biden’s claims that billionaires are not paying what they actually should owe in federal taxes, and that the tax code rewards wealth, not work..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“While we have long known that billionaires don’t pay enough in taxes, the lack of transparency in our tax system means that much less is known about the income tax rate that they do pay,” administration officials wrote in a blog post the budget office released accompanying the analysis.The White House’s calculation of what the wealthiest pay in taxes is well below what other analyses have found. The difference comes from the White House officials’ decision to count the rising value of wealthy Americans’ stock portfolios — which is not taxed on an annual basis — as income. It finds that between 2010 and 2018, those top 400 households, when including the rising value of their wealth, earned a combined $1.8 trillion and paid an estimated $149 billion in federal individual income taxes.Most measures of tax rates do not use the White House method of counting asset gains as annual income.The independent Tax Policy Center in Washington estimated this year that in 2015, the highest-earning 1,400 households in the country paid an average effective tax rate of about 24 percent, compared with an average rate of about 14 percent for all taxpayers.The White House economists — Greg Leiserson, senior economist at the Council of Economic Advisers, and Danny Yagan, the chief economist at the budget office — wrote that their calculation of low tax rates for the very wealthy flows from two types of preferential treatment for certain income in the tax code. The federal government taxes income from wages at a higher rate than income from investments, and most wealthy households report a significantly larger share of their income from capital gains and dividends than typical taxpayers do..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Mr. Leiserson and Mr. Yagan noted that “the wealthy can choose when their capital gains income appears on their income tax returns and even prevent it from ever appearing.”“If a wealthy investor never sells stock that has increased in value, those investment gains are wiped out for income tax purposes when those assets are passed on to their heirs under a provision known as stepped-up basis,” they wrote.Mr. Biden has proposed changing both those tax treatments. He would raise the capital gains rate to match the rate paid on wage income. And he would eliminate the stepped-up basis provision for wealthy heirs.But Democrats in Congress have already pushed back on both efforts. The House Ways and Means Committee approved a tax plan this month for the spending bill that left the stepped-up basis provision intact and raised the capital gains rate by much less than Mr. Biden proposed.Administration officials did not provide, in their analysis or accompanying blog post, any estimate of how much more the wealthy would pay in taxes if Mr. Biden’s full tax plan was implemented. More

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    House Democrats’ Plan to Tax the Rich Leaves Vast Fortunes Unscathed

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    The House Ways and Means Committee’s proposal to pay for trillions in social spending leaves wealth gains and inheritances largely alone. It focuses instead on a more traditional target: income.WASHINGTON — House Democrats on Monday presented a plan to pay for their expansive social policy and climate change package by raising taxes by more than $2 trillion, largely on wealthy individuals and profitable corporations.But the proposal, while substantial in scope, stopped well short of changes needed to dent the vast fortunes of tycoons like Jeff Bezos and Elon Musk, or to thoroughly close the most egregious loopholes exploited by high-flying captains of finance. It aimed to go after the merely rich more than the fabulously rich.Facing the delicate politics of a narrowly divided Congress, senior House Democrats opted to be more mindful of moderate concerns in their party than of its progressive ambitions. They focused on traditional ways of raising revenue: by raising tax rates on income rather than targeting wealth itself.Representative Dan Kildee of Michigan, a Democrat on the Ways and Means Committee, which crafted the plan, called it “the boldest common denominator.”“Being for something doesn’t make it law; 218 votes in the House, 50 votes in the Senate and the president’s signature make it law,” he said, adding, “What I don’t want is another noble defeat.”The proposal includes nearly $2.1 trillion in increased tax revenues, the nonpartisan Joint Committee on Taxation estimated on Monday. Democrats say those increases will go a long way to funding President Biden’s ambitions to expand the federal government’s role in education, health care, climate change, paid leave and more.But the bill dispenses with measures floated by the White House and Senate Democrats to tax wealth or to close off avenues that the superrich have exploited to pass on a lifetime of gains to their heirs tax-free.“It would be a monumental mistake for Congress to pass a bill that really exempts billionaires,” said Senator Ron Wyden of Oregon, the Democratic chairman of the Finance Committee.Key Democrats cautioned on Monday that the House proposal was likely to change — perhaps considerably — as Mr. Biden’s economic agenda wends its way through the House and Senate, where Democrats hold slim majorities and must hold nearly every member of their ideologically diverse caucus together. But White House officials welcomed the Ways and Means plan and said it took important steps toward the president’s vision of a tax code that rewards ordinary workers at the expense of the very rich.The proposal includes substantial measures to raise taxes on the rich. Taxable income over $450,000 — or $400,000 for unmarried individuals — would be taxed at 39.6 percent, the top rate before President Donald J. Trump’s 2017 tax cut brought it to 37 percent. The top capital gains rate would rise to 25 percent from 20 percent, considerably less than a White House proposal that would have taxed investment gains as income for the richest, at 39.6 percent.Under the committee’s plan, a 3 percent surtax would be applied to incomes over $5 million.The proposal would also raise taxes in a variety of ways on businesses called pass-through entities — like many law firms and financial companies — that distribute profits to their owners, who then pay individual income taxes on them. Those changes, including the extension of an existing 3.8 percent surtax to include pass-through income, would raise taxes primarily on high earners, generating several hundred billion dollars in revenues, by Democratic estimates.The joint committee estimated on Monday that the changes would raise about $1 trillion from high-income individuals.Republicans balked at the proposal. Business lobbying groups rejected the package, with the U.S. Chamber of Commerce slamming it as “an existential threat to America’s fragile economic recovery and future prosperity.”“President Biden, Speaker Nancy Pelosi and House Democrats are ramming through trillions of wasteful spending and crippling tax hikes that will drive prices up even higher, kill millions of American jobs and drive them overseas, and usher in a new era of government dependency with the greatest expansion of the welfare state in our lifetimes,” Representative Kevin Brady of Texas, the committee’s ranking Republican, said of the plan.But what is not included is notable. The richest of the rich earn little from actual paychecks (Mr. Bezos’s salary as the founder of Amazon was $81,840 in 2020), so a surtax on income would have little impact. Their vast fortunes in stocks, bonds, real estate and other assets grow largely untaxed each year.“The proposal is extremely modest in the area of structural change,” said Eric Toder, a co-director of the nonpartisan Tax Policy Center in Washington. “Mostly, it is about raising rates on existing tax bases.”In the Senate, Democrats are taking aim directly at accumulated wealth. The Finance Committee has proposed a one-time surtax on billionaires’ fortunes, followed by annual levies on the gains in value of billionaires’ assets, similar to the way property taxes are adjusted each year to reflect gains in housing values.Mr. Biden’s expansive tax proposals, during his campaign and as president, did not include a wealth tax. But he and top senators had called for a variety of measures to more heavily tax inherited wealth and the investments of very high earners.Representative Bill Pascrell Jr. of New Jersey, a Democrat on the Ways and Means Committee, conceded on Monday that large swaths of wealth in the country were tied up in assets, not large salaries. But he said many Democrats were leery of going too far.“I am very suspect of a wealth tax,” he said. “I think it’s perceived as ‘soak the rich.’ I don’t think it is, but that’s how it’s perceived.”Representative Bill Pascrell Jr. of New Jersey, a Democrat on the Ways and Means Committee, acknowledged that large swaths of wealth were tied up in assets, not large salaries. But he said many Democrats were leery of going too far.T.J. Kirkpatrick for The New York TimesThe committee did take aim at a loophole in retirement savings exploited by the billionaire Peter Thiel, who, according to a ProPublica investigation, was able to take a Roth individual retirement account worth less than $2,000 in 1999 and grow it to $5 billion, which could be completely shielded from taxation.To prevent such exploitation, the Ways and Means Committee would stop contributions to retirement accounts once they reach $10 million.In other areas, the committee appears to be making only glancing blows at the wealthiest Americans. Former President Barack Obama, Mr. Trump and Mr. Biden have all vowed to close the so-called carried interest loophole, in which private equity managers pay low capital gains taxes on the fees they charge clients, asserting that the money is not income because it is drawn from their clients’ investment gains.Senate Democrats have proposed closing the loophole completely, saving Treasury $63 billion over 10 years. The House proposal would merely limit the practice, forcing Wall Street financiers to hold their clients’ investment gains for five years before claiming them as capital gains and cashing out. It would save $14 billion, a fraction of the Senate proposal.Another item missing from the House plan: a measure to tax inheritances more aggressively. Mr. Biden and many other Democrats want assets such as stocks and real estate to be taxed when they are inherited by wealthy heirs, based on the gain in value from the time the original owner purchased them. Under current law, such assets face capital gains taxation only when they are sold, according to their worth when they were inherited, allowing all the gain in value over the lifetimes of the superwealthy to go untaxed as long as they are passed on to heirs.But the new proposal faced a fierce lobbying campaign, led by rural Democrats like former Senators Heidi Heitkamp of North Dakota and Max Baucus of Montana. Representative Richard E. Neal of Massachusetts, the Democratic chairman of the Ways and Means Committee, left it out.To some liberals, Mr. Neal’s pragmatism felt more like surrender.“America’s billionaires are popping Champagne tonight as the House Ways and Means Committee — led by Chair Richie Neal — fails the president, fails the country and fails history,” said Erica Payne, the president of Patriotic Millionaires, a group of wealthy liberals that embraces much higher taxes on the rich.Some Democrats expressed surprise on Monday at Mr. Neal’s political calculations. “A wealth tax? I don’t know anyone who says that’s not working for them politically,” said Representative Donald S. Beyer Jr., Democrat of Virginia and a member of the committee.But with Senator Joe Manchin III, Democrat of West Virginia, suggesting that the final package might have to be half the size of the House plan, Mr. Beyer said he understood why Democratic leaders did not want to make vulnerable lawmakers embrace the most aggressive options.“People will be saying, ‘You raised our taxes by $2.9 trillion,’” Mr. Beyer said. “Pelosi and leadership do not want to put a lot of threatened members on anything that’s just going to die in the Senate.”White House officials on Monday welcomed the House plan, while acknowledging that it was far from a final product.“We see it as a first step,” said Karine Jean-Pierre, the deputy White House press secretary.Zolan Kanno-Youngs More

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    Democrats and Lobbyists to Battle Over Tax Increases for Biden’s Social Policy Bill

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    Congressional committees this week begin drafting tax increases on the wealthy and corporations to pay for a $3.5 trillion social policy bill, but the targets are putting up a fight.WASHINGTON — Congressional Democrats always knew their battle plan for raising taxes on corporations, large inheritances and the superwealthy would not survive initial contact with the enemy.They just didn’t realize that enemy would be North Dakota-nice Heidi Heitkamp.The Democratic former senator has emerged as the smiling face of a well-financed effort to defeat a proposed tax increase that is crucial to funding the $3.5 trillion social spending bill at the heart of President Biden’s agenda. Her effort is indicative of the difficult slog ahead as the business lobby mobilizes to chip away at Democrats’ tax-raising ambitions, which some lawmakers say will have to be scaled back to maintain party unity, an assessment the White House has disputed.On Thursday, the House Ways and Means Committee is set to begin formally drafting its voluminous piece of the 10-year measure to combat climate change and reweave the nation’s social safety net, with paid family and medical leave, expanded public education, new Medicare benefits and more. The committee’s purview includes much of that social policy, but also the tax increases needed to pay for it.Democrats had hoped that the tax side would be more than notations on an accounting ledger. They regard it as an opportunity to fundamentally change policies to address growing income inequality, reduce incentives for corporations to move jobs and profits overseas, and slow the amassing of huge fortunes that pass through generations untaxed.But corporate interests, led by the U.S. Chamber of Commerce, the Business Roundtable and Americans for Tax Reform, have mobilized a multifaceted lobbying and advertising blitz to stop the tax increases — or at least mitigate them.“They’re lobbying to try to escape their obligation to pay the taxes they owe, leaving working families to pay a larger share of the burden,” Mr. Biden said at the White House on Friday. “Somebody has got to pay.”The $3.5 trillion social spending bill would help fund expanded public education.Clara Mokri for The New York TimesMembers of the Senate Finance Committee will meet this week to go over more than two dozen tax proposals. Some of them are well on their way toward inclusion in the measure, which under a complex budget process known as reconciliation would be able to pass Congress without a single Republican vote.Lobbyists expect the top individual income tax rate to return to 39.6 percent from the 37 percent rate that President Donald J. Trump’s tax cuts created in 2017. The corporate income tax rate will also rise from the 21 percent in the Trump tax cuts, though not to the 35 percent rate of the Obama years. Lawmakers say a 25 percent rate is more likely.Many Democrats are determined to tax the wealth of America’s fabulously rich, much of which goes untaxed for decades before being passed along to heirs. Currently, for instance, when large estates are passed on at death, heirs are allowed to value the stocks, real estate and other assets at the price they would fetch at the time of the original owner’s death. They pay taxes only on the gain in value from that point once the assets are sold. If the assets are not sold, they are not taxed at all..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Mr. Biden wants to have heirs to large fortunes pay taxes when the original owner dies. Those taxes would be levied on inherited assets based on the gain in value from when those assets were initially purchased.Ms. Heitkamp, who said she was recruited to the opposition campaign by the Democratic former senator-turned-superlobbyist John Breaux, is adamant that taxation upon death, regardless of wealth, is deadly politics. Ms. Heitkamp said she was finding a receptive audience among potential swing voters in rural areas, especially owners of family farms, even though Democrats say such voters would never be affected by the changes under consideration. Lobbyists already expect this piece of the estate tax changes to wash out in the lobbying deluge.“This is very consistent with my concern about revitalizing the Democratic Party in rural America,” Ms. Heitkamp said. “You may want to do this,” she said she had counseled her former colleagues, “but understand there will be risk, and risk is the entire agenda.”Even more significantly, the Finance Committee is looking at taxing the accumulated wealth of billionaires, regardless of whether it is sold. Extremely wealthy Americans like the Amazon founder Jeff Bezos would have a decade to pay a one-time tax on the value of assets like stocks that have been accruing value for years. They would then pay taxes each year on the annual gain in value of their stocks, bonds and other assets, much like many Americans pay property taxes on the annually assessed value of their homes.Another key component is the international tax code. The Biden administration has called for doubling the tax that companies pay on foreign earnings to 21 percent, so the United States complies with an international tax deal that the administration is brokering, which would usher in a global corporate minimum tax of at least 15 percent.The Organization for Economic Cooperation and Development announced in July that more than 130 countries had agreed to the new framework, which aims to eliminate tax havens and end a race to the bottom on corporate tax rates. Officials have been rushing to confirm the details before the Group of 20 leaders meet in Rome in October.Extremely wealthy Americans like the Amazon founder Jeff Bezos would have a decade to pay a one-time tax on the value of assets such as stocks that have been accruing value for years.Mandel Ngan/Agence France-Presse — Getty ImagesBut countries such as France are concerned that the United States will not be able to live up to its end of the bargain if Congress cannot raise the minimum tax.The moment of truth is approaching. Representative Lloyd Doggett of Texas, a senior Democrat on the Ways and Means Committee, and 40 other members of his party on Tuesday backed the White House. Yet some Democratic lawmakers have expressed concern that U.S. companies would still be at a competitive disadvantage if other countries enacted minimum tax rates as low as 15 percent and the United States had a higher rate.Treasury Secretary Janet L. Yellen addressed those concerns in a Twitter post on Friday.“As Congress begins to finalize their legislation, I urge them to remember the historic opportunity that we have to end the race to the bottom and finally have a foreign policy and a tax code that works for the middle class,” she wrote.Republicans are already on the attack. After the disappointing monthly jobs report on Friday, Representative Kevin Brady of Texas, the ranking Republican on the Ways and Means Committee, said the slowing economy would “only get worse if the Democrats’ trillions in tax hikes and welfare spending is rammed through Congress in September.”Senator Ron Wyden of Oregon, the chairman of the Finance Committee, said he understood that business groups and Republicans would howl that the tax increases would kill jobs, stifle the economy and hurt ordinary, struggling Americans.“The big lobbies are going to attack you under any circumstance,” he said, “and half the time they’re just making it up.”But he insisted that the politics had changed. Americans who struggled during the coronavirus pandemic can see how rich others have become. New revelations from a trove of tax records leaked to ProPublica showed that household names like Mr. Bezos and Elon Musk paid virtually no federal taxes.Other lawmakers are not so sure, especially in the House, where midterm campaigns loom and a razor-thin Democratic majority is clearly at risk. Among the most vulnerable members are those from conservative-leaning districts where tax increases are particularly unpopular.“No one wants to throw the House away,” said Representative Donald S. Beyer Jr., Democrat of Virginia, a member of the Ways and Means Committee. “We’re all mindful of our frontline candidates.”Estate and capital gains tax changes proposed by the president and embraced by Mr. Wyden are aimed at the superrich, but the campaign against them frames the issue around family farms and small businesses. Ms. Heitkamp rebuffed Mr. Wyden’s assurance that he could structure the changes to affect only the very wealthy and the gain in value of their assets without taxation.“People don’t believe that, because they believe that rich people always have the lane to get into Congress,” she said. “I get that you’re trying to deal with a huge disparity in wealth in this country, and I get that you are concerned about that for the future of America. I share the concern. Taxing unrealized capital gains is not the path forward.”Some lawmakers and tax lobbyists are already circulating a document handicapping which measures are likely to survive — and which are not. A corporate tax rate increase at home and abroad is likely to pass, though it may not be as high as some Democrats would like. So is a higher top income tax rate on individuals. Capital gains tax rates are expected to rise somewhat, though not to the ordinary income tax rate of 39.6 percent for the very rich, as Mr. Biden has proposed.A measure to increase tax law enforcement, which fell out of a separate bipartisan infrastructure bill, is likely to reappear in the reconciliation bill.But lobbyists expect the proposal to make heirs pay immediate taxes on inheritances based on asset purchase prices to fall out of the plan.They also see a straight, 15 percent minimum tax on overseas income as imperiled. Even some measures that looked like slam dunks may still be rejected because of the back-room lobbying campaign that has just begun.“They’re lobbying to try to escape their obligation to pay the taxes they owe, leaving working families to pay a larger share of the burden,” Mr. Biden said of corporate interests on Friday at the White House.Stefani Reynolds for The New York TimesThat includes closing the so-called carried interest loophole, which allows richly compensated private equity and hedge fund managers to claim the fees they charge clients as investment income, subject to low capital gains tax rates, not income tax rates. Every president since Barack Obama has denounced the provision and demanded its closure, only to lose to influential lobbyists.The U.S. Chamber of Commerce on Tuesday started a campaign to stop the loophole from being closed, saying doing so “would reduce investment, lead to widespread job losses and decrease tax revenues.” Mr. Wyden called the assertions “insulting to the intelligence of every American.”Administration officials insisted that taxing the rich and corporations would help sell the bill.“Should we let millions of children grow up in poverty in order to protect offshore tax loopholes?” Kate Bedingfield, the White House communications director, wrote to House Democrats in a memo on Tuesday. “Should we let middle-class families bear crushing costs for child care and elder care rather than asking the very richest among us to pay their fair share? Those are the questions before us.” More