House Democrats unveiled plans for trillions in tax hikes to pay for President Joe Biden’s massive partisan infrastructure and social spending bill.
Ways and Means Chairman Richard Neal of Massachusetts laid out Democrats’ tax hike plans Monday morning, with a centerpiece of raising the corporate rate to 26.5% from 21% and a top personal rate of 39.6%, up from 37%.
“We can do all this while responsibly funding our plans,” Neal said in a statement.
The plan, which would raise as much as $2.9 trillion through tax hikes over the next 10 years, signals a compromise from what Biden wanted, which was a corporate tax rate of 28%. It includes a minimum tax on foreign corporate earnings of 16.5% instead of Biden’s sought-after 21%.
Democrats are looking to raise $1 trillion from the richest Americans and $900 billion from corporate America. The new tax hike proposal, when combined with approximately $600 billion in dynamic revenue growth estimated by the Biden administration, would fully offset the cost of the Democrats’ $3.5 trillion budget package, according to the drafters.
DEMOCRATIC SENATORS EYE RANGE OF TAX HIKES TO PAY FOR $3.5 TRILLION SPENDING PACKAGE
Here are some of the rest of the proposals:
- The top tax rate on individuals of 39.6%, up from the 37% rate set by the 2017 Republican tax cut law, would only apply to individuals with taxable income over $400,000 a year and married couples earning over $450,000 annually. Biden has previously promised that those earning below $400,000 a year would not see their taxes go up at all.
- Impose a surtax on the highest-income taxpayers by making those who make more than $5 million pay an additional 3% tax in order to raise approximately $127 billion.
- The top capital gains rate for investments would increase to 25% from 20% in order to raise approximately $123 billion.
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Centrist and liberal Senate Democrats are fighting openly about the top-line budget amount of $3.5 trillion, with Sen. Joe Manchin of West Virginia suggesting over the weekend that an amount between $1 trillion-$1.5 trillion would be within his ballpark, while Sen. Bernie Sanders of Vermont said anything less than $3.5 trillion would be “totally unacceptable.”
