WASHINGTON, D.C. – According to reports, President Joe Biden is planning the first major tax hike in three decades – targeting the rich and large corporations – as a way to undo tax cuts instituted by former President Donald Trump, as well as partially paying for his next spending package, of which the tax hike will be a component.
While campaigning in 2020, Biden touted several initiatives his administration would be pursuing if he was elected to office, including an infrastructure bill, ways of fighting climate change, health care, and more. Whatever the new bill that the Biden administration is working on, it’s reported to cost upwards of $4 billion and the proposed tax hikes are said to be targeted at helping pay for at least part of it, as opposed to simply taking on more government debt.
Reports say that the planned tax hikes will target many of the tax cuts that former President Donald Trump passed in 2017, such as increasing the corporate tax rate from 21 percent to 28 percent; bumping up the income tax rates on individuals making over $400,000 a year; expanding the estate tax; a higher capital-gains tax rate for individuals earning at least $1 million a year; and reducing tax preferences for “pass-through” businesses.
A study of the tax plan indicates that it could raise $2.1 trillion in a ten-year time span. If the proposed legislation is passed, the tax hikes would likely not take place until the start of 2022.
Whatever the new spending package that will be bundled with the proposed tax hike entails, it is sure to encounter resistance from Republicans – and some moderate Democrats – who have been against at the high level of government spending as of late.
Moderate Senator Joe Manchin (D-WV), who was critical of the recent American Rescue Plan’s cost, has stated that if Biden’s next package does indeed includes infrastructure, he is in favor of raising taxes to pay for it, as opposed to taking on more debt. However, he will still not vote for it unless it contains concessions that bring Republicans on board as well, as opposed to using budget reconciliation to allow passage via simple majority, as Democrats did with the American Rescue Plan.