President Joe Biden has proposed a set of new tax hikes on billionaires, corporations and rich investors. Biden’s budget request reportedly calls for a 25% minimum tax on billionaires. Additionally, he has suggested to double the capital gains tax rate from 20% to 39.6%.
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House Speaker McCarthy is on the other page
The proposal will officially be released on Thursday to the public. However, the aforementioned details were revealed by an unnamed White House official to Bloomberg. Given that the Republicans now control the House of Representatives, the said proposal has “little chance of passing” Congress, according to Bloomberg. The proposal, by and large, echoes Biden’s multi-trillion dollar Build Back Better economic package.
The Biden administration has been working towards reducing the deficit, and officials argue that the latest proposal shows a commitment to the same. They’ve projected that Biden’s budget would cut down $3 trillion via increased revenues over the next decade. In retrospect, it would render a “politically popular” return to tax levels in place before former President Donald Trump’s tax reform legislation.
Bloomberg reported that polls have time and again showed that taxes on the wealthy and large corporations are favored by a majority of Americans. Nevertheless, House Speaker Kevin McCarthy shot down Biden’s plans to increase levies. He told reporters on Wednesday,
“I do not believe raising taxes is the answer.”
According to Biden’s proposal, the richest 0.01% of Americans will have to pay a minimum of 25% tax. Simultaneously, the top tax rate for Americans making $400,000 will also be increased to 39.6% from 37%. This would ultimately reverse one of Trump’s tax cuts. However, the rate for the ones making below the said threshold would remain unchanged.
Furthermore, Biden’s proposal calls for investors making at least $1 million to pay that 39.6% on their long-term investments. The same is currently taxed at 20%. Additionally, Biden has also put forward a corporate tax rate hike to 28% from 21%.