How would Biden's "Billionaire Minimum Income Tax" work?

President Biden said Monday he wants to introduce a new tax levied on the wealthiest families in U.S. The idea is to make sure the richest Americans "pay their fair share," he said — an issue that's taken on added urgency in recent years given the wealth gap in the U.S. is roughly as wide as it was a century ago during the Gilded Age.

Under the proposal, the new tax — dubbed the "Billionaire Minimum Income Tax" — would apply to the roughly 20,000 families in the U.S. with assets of more than $100 million. These households would be subject to a new minimum tax of 20%,  ensuring they don't pay lower tax rates than many lower- and middle-income Americans. 

Although the U.S. tax system is designed to be progressive, with the wealthiest citizens paying a greater share of their incomes than everyone else, some economic research has found that the 400 richest families pay a lower tax rate than the middle class. That's due to four decades of tax cuts for the rich, as well as preferential treatment for capital gains, such as the profits made from sales of stocks and bonds, which are taxed at a lower rate than income.