President Joe Biden is planning a major federal tax increase for the first Time since 1993 to help pay for his long-term economic package following the pandemic stimulus bill, foreign media said, citing sources.
Unlike the $1.9 trillion pandemic stimulus bill, the next initiative is expected to be larger and will not rely solely on government borrowing as a source of funding. It is becoming increasingly clear that tax increases will be a component; Treasury Secretary Yellen has said that at least part of the next bill’s source of finance will be tax money, and has said that higher tax rates are being considered and that key advisers are preparing for a basket of measures.
For the Biden Administration, the planned changes are not only an opportunity to fund key programs (such as infrastructure, climate and expanded aid to poor Americans), but also to address what Democrats see as the unfairness of the tax system itself. The plan would test Biden’s ability to appeal to Republicans and the Democrats’ ability to stay united.
Sarah Bianchi, head of U.S. public policy at Evercore ISI, said his overall outlook has been that Americans believe tax policy should be fair, and he has looked at all policy options from that perspective. That’s why the focus is on dealing with unequal treatment between work and wealth, the former Biden economic aide said.
While the White House rejected Democratic Senator Warren’s proposal for a wealth tax, the administration’s current thinking is indeed aimed at the wealthy.
The White House is expected to propose a series of tax hikes, largely based on Biden’s 2020 campaign political vision, according to four people familiar with the matter. The following are some of the proposals currently planned or under consideration, said the sources, who declined to be named because they were not publicly discussed
The corporate tax rate would be raised from 21 percent to 28 percent for individuals earning more than $400,000, and the income tax rate would be raised to expand estate tax coverage For individuals earning at least $1 million a year, their capital gains tax rate would be raised.
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