The Biden administration plans to suggest tax increases for America’s wealthy and major corporations.
Key Details
- President Joe Biden unveiled a new budget request to Congress, and the plan includes a minimum 25% tax on the 0.01% of Americans.
- The new legislation would curtail loopholes allowing some wealthy Americans to bypass taxes they would otherwise pay on investments.
- Investors making at least $1 million on investments would pay a $39.6 tax rate on long-term investments. They currently pay a 20% capital-gains tax.
- The proposed regulations would also reverse some Trump-era tax legislation and raise the tax on Americans making $400,000 a year from 37% to 39.6%, Axios reports.
- The bill would also increase income levies on corporations and billionaires. The corporate tax rate would be set at 28%.
Why it’s news
This budget proposal bears similarities to Biden’s Build Back Better plan, which faced strong opposition and was eventually voted down in Congress. The current plan is unlikely to pass, especially with a Republican majority House of Representatives.
Even when Democrats controlled Congress, President Biden could not get the bill through the legislative process. The Inflation Reduction Act is the bare-bones version of the previous bill.
However, the Biden administration’s proposal comes at a time when lawmakers are debating over whether or not to raise the debt ceiling. Passing the bill could become a negotiating tool as the deadline for default approaches. President Biden’s proposal could also serve as a part of his platform during an anticipated reelection campaign.
Proponents of the proposal in the Biden administration claim that the budget would reduce the deficit, cutting $3 trillion by increasing revenue over the next decade. The recommendations also represent a return to tax regulations in place before former President Donald Trump’s tax reform legislation.
Already Republican opposition to the proposals is forming. House Speaker Kevin McCarthy told reporters earlier this week, “I do not believe raising taxes is the answer.”