Dems seek tax hikes for $3.5T 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 individuals earning more than $400,000, or $450,000 for couples, and there would be a 3% tax on wealthier Americans with adjusted income beyond $5 million a year. For big businesses, the proposal would lift the corporate tax rate from 21% to 26.5% on incomes beyond $5 million, slightly less than the 28% rate the president had sought.
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, DMass., the chairman of the tax-writing Ways & Means Committee, said the proposals, taken together, would “expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.”
It’s an opening bid at a daunting moment for Biden and his allies in Congress as they assemble the massive package that is expected to become one of the largest single domestic policy measures considered in decades. The president’s “Build Back Better” agenda includes spending on child care, health care, education and strategies to confront climate change. It is an ambitious undertaking on par with the Great Society or New Deal.
Republican critics decry the sweep of Biden’s plan, suggesting it slopes toward a Western European-style socialism, and they particularly reject the taxes required to pay for it, bristling because it would reverse the GOP tax cuts that were approved just a few years ago.
Senate Republican leader Mitch McConnell said the proposal is “the last thing American families need.” All GOP lawmakers are expected to vote against it.
But Republicans are largely sidelined as Democrats rely on a budget process that will allow them to approve the proposals on their own, if they can muster their slight majority in Congress.