President Joe Biden is proposing a series of new tax increases on billionaires, rich investors and corporations in his latest proposal for how Congress should prioritize taxes and spending.
Biden’s budget request to Congress, which is slated to be released Thursday, calls for a 25% minimum tax on billionaires, according to a White House official familiar with the proposal who declined to be named because the plan is not yet public. The plan would also nearly double the capital gains tax rate for investment to 39.6% from 20% and raise income levies on corporations and wealthy Americans.
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The proposal, which is largely a reprise of Biden’s multi-trillion dollar Build Back Better economic package, has little chance of passing Congress, particularly now that Republicans control the House of Representatives. Biden was unable to pass similar tax increases when Democrats enjoyed control of both chambers of Congress, instead settling for slimmed down legislation focusing on energy and health policy known as the Inflation Reduction Act.
But the White House’s proposal foreshadows both Democrats’ strategy ahead of high-stakes negotiations over the debt ceiling and government spending later this year, as well as the economic platform underpinning an expected Biden reelection campaign.
Administration officials argue that the proposals show a commitment to cutting the deficit — projecting that Biden’s budget would slash $3 trillion largely through increased revenues over the next decade — and represent a politically popular return to tax levels in place before former President Donald Trump’s tax reform legislation. Taxes on the wealthy and large corporations have been a rallying cry for progressives for years and polls repeatedly show they are favored by a majority of Americans.
House Speaker Kevin McCarthy immediately dismissed Biden’s plans to increase levies, telling reporters Wednesday “I do not believe raising taxes is the answer.”
The Biden proposal would require that the richest 0.01% of Americans pay at least a 25% tax rate. It would also increase the top tax rate for Americans making $400,000 to 39.6% from 37%, reversing one of Trump’s tax cuts — though tax rates for those making below that amount would remain untouched. It additionally calls for investors making at least $1 million to pay that 39.6% on their long-term investments, which are currently taxed at a 20% rate.
Read the full article here by Laura Davison, Justin Sink, Advisor Perspectives.
