- President Joe Biden is planning the first big tax hike since 1993
- The tax hike would help fund the US economic recovery program.
- The tax increase would raise $ 2.1 trillion in 10 years
President Joe Biden is planning the first major federal tax hike, the largest since 1993, to help fund the nation’s economic recovery program, unidentified sources told Bloomberg.
The tax hike would represent the largest increase in nearly 3 years and would be the next step after the recently approved $ 1.9 trillion economic stimulus package, The Hill reported.
The biggest tax hike in almost 30 years
Unidentified sources revealed to Bloomberg that the tax hike is related to election promises Biden made during his 2020 campaign. According to the sources, the tax increase would include raising corporate tax from 21 percent to 28 percent. .
Likewise, it would also include increasing the income tax rate for people who earn more than $ 400,000, expanding the inheritance tax, cutting tax preferences in transfer companies as well as in limited liability companies.
The tax increase would raise $ 2.1 trillion in 10 years
As reported by Bloomberg, an independent analysis of the plan fiscal of the president’s campaign carried out by the Center for Fiscal Policy indicated that the tax increase would raise about $ 2.1 trillion in 10 years.
During his election campaign, Biden had said he would repeal Trump’s tax cuts from his “first day” as president, yet he has not done so. Democratic Senator Joe Manchin told The Hill that in his opinion, repealing Trump’s tax cuts would be “ridiculous.”
How would the tax increase affect you?
The president’s key advisers are preparing for a package of measures that could include an increase in both the corporate tax rate and the individual rate for high-income individuals, according to Bloomberg.
The tax hike would include a higher tax rate on capital gains for people who earn at least $ 1 million.
Expanded aid for the poorest Americans
The Biden Administration’s planned changes to federal taxes would represent an opportunity to fund infrastructure, climate change, and expanded aid for the poorest Americans, as well as a good opportunity to address what Democrats argue are “injustices.” in the current tax system.
The plan will test how Biden can influence Republicans as well as Democrats’ ability to stay on the same page.
“Fiscal policy must be fair”
“His whole perspective has always been that Americans believe that fiscal policy should be fair, and he has seen all of his policy options through that lens,” said Sarah Bianchi, US chief of public policy at Evercore. ISI and a former financial assistant to Biden. “That is why the focus is on addressing unequal treatment between work and wealth,” he added.
The current idea of the Administration’s plan on raising taxes is aimed squarely at higher-income Americans.
What would the tax increase imply?
If the tax increase becomes a reality it could:
-Raise the corporate tax rate to 28% from 21%.
– Raise income taxes for people earning more than $ 400,000
– Reduce tax preferences in transfer companies
– Expand the wealth tax
– Raise taxes on capital gains