Joe Biden is planning to propose the first substantial federal tax hike since 1993 for Americans to help pay for his long-term economic program after he signed the largest stimulus package in U.S. history with a price tag of $1.9 trillion.
Four people familiar with discussion told Bloomberg that Biden is expected to propose a series of tax increases, including repealing parts of Donald Trump’s 2017 tax law that resulted in most Americans seeing more in their paychecks, to help fund the latest proposal.
Trump’s tax cuts led to most Americans receiving more take home pay and resulted in an average increase of $90 in tax returns from 2017 to 2018.
With the former president’s income tax cuts, Americans immediately saw somewhere between a 0.4 per cent and 2.9 per cent increase in their paychecks after taxes.
Now the White House is preparing to roll out another sweeping plan to tackle infrastructure and the economic crisis, which some say could fall somewhere between the $2-$4 trillion mark.
Biden plans to kick off his cross-country tour this week promoting and seeking to bolster enthusiasm for the coronavirus relief package, where the White House will also ensure he receives credit for benefits included in the bill.
President Joe Biden is preparing to announce the largest federal tax hike since 1993 to help fund his next long-term economic plan tackling infrastructure, climate and education – a package that could reach somewhere between $2-$4 trillion
Among Biden’s ideal proposals in the tax hike is raising the income tax on those earning more than $400,000 and implementing a higher capital-gains tax rate for individuals earning at least $1 million
Next on the president’s docket is getting another pricey funding bill through Congress that addresses infrastructure, climate and education.
Republicans are more than likely to pounce on the plan, painting Democrats as the Party of higher taxes.
The tax hike could also blow any chances of lawmakers reaching a bipartisan deal on infrastructure – something Democratic Senator Joe Manchin says is unacceptable and that he will likely block.
With a narrow majority in the House and a 50-50 split in the Senate, Democrats much craft the proposal in a way that gains support from nearly every lawmaker in their caucus.
White House officials are now facing a conundrum on how much of the bill should be paid for with tax hikes and what parts should be financed with even more federal borrowing.
The Monday Bloomberg report details that the sources say Biden’s plan would propose making changes to ensure the U.S. tax code is more progressive, another hard sell for a super-tight Democratic majority to pass.
Among Biden’s ideal proposals in the tax hike is raising the corporate tax rate by 7 per cent from 21 per cent to 28 per cent.
He also plans to raise the income tax on those earning more than $400,000 and implement a higher capital-gains tax rate for individuals earning at least $1 million per year to help fund his next spending package.
Also on the docket to get Americans to pay for the plan is scaling back tax preferences for businesses and expanding the reach of the estate tax.
Biden’s Treasury Secretary Janet Yellen said Sunday that the administration has yet to decide if it will move forward with a wealth tax.
‘That’s something that we haven’t decided yet and can look at,’ Yellen told ABC’s ‘This Week’ host George Stephanopoulos during a Sunday interview when asked about the wealth tax.
Biden returned to the White House Sunday afternoon as he prepares to deliver remarks on implementing the American Rescue Plan Monday
Biden is also kicking off a cross-country tour promoting the $1.9 trillion COVID relief plan
She instead noted the other proposals the president is pursuing, saying: ‘Those are alternatives that address—that are similar in their impact to a wealth tax.’
A group of far-left lawmakers, including Massachusetts Senator Elizabeth Warren, recently proposed an ‘ultra-millionaire tax’ that would create a 2 per cent annual tax on the net worth of households and trusts falling between $50 million and $1 billion.
In the meantime before a new package is proposed, Biden is hitting the road this week for his ‘Help is Here’ tour to promote the American Rescue Plan. First, he will deliver remarks at the White House Monday afternoon on implementing the sweeping package.
Other than the first and second couple, members of Biden’s cabinet will also back up promoting the massive spending plan.
The White House insists the tour is about educating the public on what’s included in the legislation, which Biden signed Thursday, rather than a full court press on getting the president credit for the benefits.
White House Deputy Chief of Staff Jen O’Malley Dillon outlined in a memo to senior staff, obtained by ABC News last week, that outreach efforts during the tour will focus on ’10 key aspects of the bill,’ like helping veterans and small businesses, severely dropping child poverty numbers and bolstering rural health care.
‘We’ll be putting surrogates and senior administration officials on local TV in markets around America,’ O’Malley Dillion wrote in the memo. ‘We’ll mobilize our coalition of over 400 supportive mayors and governors – Democrats and Republicans alike – to talk about what the plan means for them and their communities. We’ll continue to engage organized labor, the business community, and other groups, to reinforce why the Rescue Plan is vital in getting Americans back to work.’
Meanwhile, the $1,400 stimulus checks could start hitting Americans’ bank accounts this week.
Biden could announce during his address Monday afternoon that Gene Sperling will oversee implementation of the nearly $2 trillion plan, people familiar with the matter told The Washington Post.
The longtime Democratic economic policy expert and former director of the National Economic Council during the Bill Clinton and Barack Obama administration is being tapped to spearhead the president’s first major win.