Biden Wants to Pay for Future Spending Sprees With First Big Tax Hike Since 1993
Bloomberg News learned President Joe Biden wants to include the first big federal tax hike since 1993 to pay for future “projects” he has planned for his administration.
Biden and the Democrats also want to raise taxes in the name of fairness.
“His whole outlook has always been that Americans believe tax policy needs to be fair, and he has viewed all of his policy options through that lens,” said Sarah Bianchi, head of U.S. public policy at Evercore ISI and a former economic aide to Biden. “That is why the focus is on addressing the unequal treatment between work and wealth.”While the White House has rejected an outright wealth tax, as proposed by progressive Democratic Senator Elizabeth Warren, the administration’s current thinking does target the wealthy.
But Democrats love to spend your hard-earned money! They passed the $1.9 trillion “COVID relief” bill, which spent more on pork than providing actual assistance to the taxpayer.
The projects will likely include “infrastructure, climate and expanded help for poorer Americans.” After what we saw in the COVID bill how much do you want to bet the latter will get the short end of the stick?
Sources said Biden wants to stick to his 2020 campaign promises. That includes repealing parts of the 2017 tax breaks benefitting “corporations and wealthy individuals, as well as making other changes to make the tax code more progressive.”
People told Bloomberg these items are in the proposal or might be added later:
- Raising the corporate tax rate to 28% from 21%
- Paring back tax preferences for so-called pass-through businesses, such as limited-liability companies or partnerships
- Raising the income tax rate on individuals earning more than $400,000
- Expanding the estate tax’s reach
- A higher capital-gains tax rate for individuals earning at least $1 million annually. (Biden on the campaign trail proposed applying income-tax rates, which would be higher)
I hate to assume anything about a non-existent spending bill, but these numbers seem about right. It wouldn’t shock me if they underestimated the costs:
An independent analysis of the Biden campaign tax plan done by the Tax Policy Center estimated it would raise $2.1 trillion over a decade, though the administration’s plan is likely to be smaller. Bianchi earlier this month wrote that congressional Democrats might agree to $500 billion.The overall program has yet to be unveiled, with analysts penciling in $2 trillion to $4 trillion. No date has yet been set for an announcement, though the White House said the plan would follow the signing of the Covid-19 relief bill.
America has a $28 trillion debt and $3.1 trillion deficit for 2020.
The Democrats need 10 Republicans to pass the bill “under regular Senate Rules.”
The Omnibus Budget Reconciliation Act of 1993 only passed because Vice President Al Gore broke the tie in the Senate. It increased the income tax rate to 39.6%, corporate income tax rate, fuel taxes, etc.
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