Taxes

Biden’s Next Big Proposal Includes Taxes on the Rich

SK Ashby
Written by SK Ashby

Now that the coronavirus spending package is out the door, the White House and congressional Democrats are in early discussions about a large infrastructure and jobs bill that would cost up to $4 trillion over ten years.

The $1.9 trillion American Rescue Plan is deficit financed, but the next big proposal will not be. We know it will include tax hikes of some description and now we have some idea of what that's going to look like.

Bloomberg reports that it will include several tax hikes on corporations and wealth shareholders.

The following are among proposals currently planned or under consideration, according to the people, who asked not to be named as the discussions are private:

  • Raising the corporate tax rate to 28% from 21%
  • Paring back tax preferences for so-called pass-through businesses, such as limited-liability companies or partnerships
  • Raising the income tax rate on individuals earning more than $400,000
  • Expanding the estate tax’s reach
  • A higher capital-gains tax rate for individuals earning at least $1 million annually. (Biden on the campaign trail proposed applying income-tax rates, which would be higher)
  • This is more or less a repeal of Trump's tax cuts for the rich that were overwhelming tilted toward rich shareholders and executives. Average working Americans saw very little from the GOP's 2017 Tax Cut and Jobs Act that fueled mega-mergers between some of the largest corporations that also cut tens of thousands of jobs in the process.

    I do not expect to see much if any Republican support for these measures but Senator Joe Manchin (D-WV) has already floated a similar proposal himself and he may be the deciding vote to use reconciliation if doing so is necessary.

    Republicans used reconciliation to pass their tax cuts for the rich in 2017 so it would only be fair to see them undone through reconciliation.

    The poorest Americans won't pay another dime more than they already do. Rich Americans who were already the richest people in the world before they received their last tax cut will still be the richest people in the world after they lose part of it.