Bloomberg noted Monday (March 15) that the White House administration is preparing the first major federal tax hike in nearly 30 years to fund the recently implemented $1.9 trillion Epidemic relief package.
The paper quoted sources as saying that the approach in question would be consistent with a promise made by Biden during the 2020 election to raise U.S. corporate and federal taxes.
The White House’s planned tax increases reportedly include raising corporate taxes from 21 percent to 28 percent; raising income tax rates on those earning more than $400,000 a year; expanding the estate tax; cutting tax breaks for entrepreneurs such as limited liability companies; and setting higher capital gains tax rates for individuals earning at least $1 million a year.
The White House has not yet commented on the issue.
People familiar with the matter noted that the tax increases would be rolled out as part of an infrastructure and jobs plan, and that the new plan could include a repeal of Trump‘s 2017 tax law, which benefited corporations and the wealthy in large part.
Biden said during the campaign that he would repeal Trump’s tax cuts on his “first day” in office, although he has not yet done so.
Democratic lawmakers have expressed hesitation to raise taxes. Moderate Democratic Sen. Joe Manchin (D-W.Va.) commented to The Hill that he thought it would be “ridiculous” to repeal the Trump tax cuts, but he later retracted his remarks and said “everything is on the table.”
Former Biden economic aide Sarah Bianchi told Bloomberg that the current administration’s overall policy outlook has been “focused on addressing the inequality of treatment between work and wealth.”
Bloomberg reported that the tax increase could go into effect in 2022, adding that some lawmakers have called on the administration to delay implementation of the provision because of the high unemployment rate associated with the pandemic.
An anonymous Democratic House member told The Hill in February that they do not believe the government should raise taxes. The person said, “People will accept that corporate taxes are raised some points, but beyond that you will have problems, especially during an economic crisis.”