After a $ 1.9 trillion coronavirus stimulus package, President Biden plans the first major tax hike since 1993 to help pay for infrastructure, climate and continuing care initiatives for the poor Americans. according to a report Monday.
The boost could include an increase in the corporate tax rate and the individual rate for people earning more than $ 400,000 a year, among other things, Bloomberg News reported.
The media also reported that the Biden administration considers adjusting the tax rate not only as a means to pay for projects, but also as an opportunity to control inequalities in the economic system.
According to Bloomberg, the proposals the White House is currently considering include raising the corporate tax rate to 28% from 21%, restricting tax preferences for “passive companies,” raising the corporate tax rate. income of people earning more than $ 400,000, extending property tax and a higher rate of capital gains tax for people earning at least $ 1 million a year.
Last month, Treasury Secretary Janet Yellen noted that she could raise taxes on cards later in the year as part of a legislative package.
He told CNBC that it “would involve spending and investment for several years” on measures such as infrastructure and education. “And probably tax increases to pay at least a portion that would probably come in slowly over time.”
Although the COVID stimulus plan was based on increasing public debt as a source of funding, the additional targets did not, according to the report.
But any intrusion is fraught with political risks on the part of lobbyists and constituencies that protect themselves against changing tax breaks or raising tax rates and would face fierce resistance from Republicans in Congress.
“All his perspectives have always been that Americans believe that fiscal policy should be fair and he has seen all of his political choices to that end,” said Sarah Bianchi, head of U.S. public policy for Evercore. ISI and Biden’s former economic assistant told Bloomberg.
“That’s why the focus is on addressing the unequal treatment between work and wealth.”
To get a bill through the 50-50 Senate, Democrats would need the votes of ten Republicans under current rules, a strong uprising in the face of resistance from the Republican Party.
“We will have a big, solid discussion about the desirability of a big tax increase,” Senate Minority Leader Mitch McConnell (R-Ky.) Said last month, predicting Democrats would try to use reconciliation to approve any tax bill they did with the coronavirus relief plan.
The Biden administration has rejected a 3 percent tax on revenues in excess of $ 1 billion, as proposed by Sensor Elizabeth Warren (Massachusetts) and Bernie Sanders (I-Vt.), But still intends to direct to the rich.
The report also said the tax package would repeal parts of former President Donald Trump’s 2017 tax plan that benefited businesses.
According to an analysis of Biden’s Fiscal Policy Center’s fiscal plan, it was estimated to increase $ 2.1 trillion over the next 10 years, but is expected to be lower.