San Francisco Chronicle
Dems outline tax hikes to fund huge spending plan
WASHINGTON — House Democrats unveiled a sweeping proposal Monday for tax hikes on big corporations and the wealthy to fund President Biden’s $3.5 trillion rebuilding plan, as Congress speeds ahead to shape the far-reaching package that touches almost all aspects of domestic life.
The proposed top tax rate would revert to 39.6% on couples earning more than $450,000, and there would be a 3% tax on wealthier Americans making more than $5 million a year. For big businesses, the proposal would raise the 21% corporate tax rate to 26.5% on incomes beyond $5 million.
In all, the tax hikes are in line with Biden’s own proposals and would bring about the most substantive changes in the tax code since Republicans with then-President Donald Trump slashed taxes in 2017. Business and anti-tax groups are sure to object. But Democrats are pressing forward.
Rep. Richard Neal, D-Mass., the chairman of the tax-writing Ways and Means Committee, said taken together, the proposals would “expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.”
It’s a daunting moment for Biden and his allies in Congress as they assemble the huge package. The president’s “build back better” agenda includes spending on child care, health care, education and strategies to confront climate change. It is a sweeping undertaking, on par with the New Deal.
One Democratic senator — Sen. Joe Manchin, D-W. Va. — vital to the bill’s fate already has said the cost will need to be slashed to $1 trillion to $1.5 trillion to win his support.
Democrats have no votes to spare if they want to enact Biden’s agenda, with the Senate split 50-50 and Vice President Kamala Harris the tiebreaker if there is no Republican support. Democratics hope to have the bill drafted by Wednesday.
The White House welcomed the preliminary tax plan, which “makes significant progress towards ensuring our economy rewards work and not just wealth,” said deputy press secretary Andrew Bates.
“This meets two core goals the president laid out at the beginning of this process — it does not raise taxes on Americans earning under $400,000 and it repeals the core elements of the Trump tax giveaways for the wealthy and corporations,” he said.