A senior Democrat official in the US Senate revealed Wednesday a plan to tax America's wealthiest to fund a massive spending plan backed by President Joe Biden.

The proposed taxation plan on the income of billionaires, also known as the 'Billionaires Income Tax,' would apply to about 700 people with either $1 billion in assets or $100 million in annual income for three consecutive years, and would also raise "hundreds of billions of dollars," Senator Ron Wyden, who leads the chambers finance committee, said Wednesday.

The plan constitutes the latest attempt made by Biden's Democratic party to raise funds for his proposal to overhaul the US infrastructure that could cost up to $2 trillion. The plan could see the United States following the European model of enacting social policies, such as universal pre-kindergarten and childcare subsidies.

The Democrat proposal would see Washington directing its taxation powers right at the billionaires, whose wealth has seen a massive increase amid the COVID-19 pandemic. The wealth accumulation has been criticized by US citizens who have accused them of not contributing enough to the country. Elon Musk and Jeff Bezos alone saw their wealth increase by $200 billion last year during the pandemic.

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Wyden said, "Working Americans like nurses and firefighters pay taxes with every paycheck, while billionaires defer paying taxes for decades, if not indefinitely."

"The wealthiest few who avoid taxes by indefinitely holding assets are also able to borrow against those assets to fund their lifestyles," the Senator added, explaining that this means the wealthiest opt-out of paying while paying only low-interest rates on loans from Wall Street banks.

If this proposal comes into play, the assets of billionaires, like stocks, would be evaluated each year, and taxes would be levied had the stocks' value increased. A decrease in the latter's value would lead to a write-off for potentially up to three years.

Under current US law, taxes on a stock's value are typically only paid if it is sold.

The US would impose a new tax on sales of nontradable assets, such as real estate or business interests and account for interest on unpaid taxes during the years the person held it.

The proposal, however, allowed for an individual to designate up to $1 billion of stock in a single business as "a nontradable asset," in an attempt to address concerns that the tax could force the wealthy to sell off controlling stakes in companies.