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WASHINGTON — House Democrats unveiled Monday a series of proposals to fund the party’s upcoming priorities with a series of tax hikes on the wealthiest Americans and corporations.
The effort comes as Democrats search for ways to fund their spending proposals, including a large-scale expansion of the social safety net touching on family care, public education and climate policies. Taken together, the changes would raise about $2.9 trillion in revenue.
The proposals would bring back a tiered system for corporate taxes, raising the rate from 21% to 26.5% for corporations that have more than $5 million in annual revenue, while lowering it to 18% for companies that make less than $400,000 in revenue.
All companies with revenue between those brackets would remain at the 21% rate.
The changes for the country’s wealthiest companies are not as high as the 28% proposed by President Joe Biden or the 39% rate some businesses paid before 2017. Yet a pivotal swing vote in the Senate, Sen. Joe Manchin, D-W.Va., has said he will only support a 25% corporate tax rate.
Many of the corporate tax hikes would reverse the 2017 tax cuts enacted under former President Donald Trump and considered unimpeachable by many Republicans. It is unclear if all Democrats on the House Ways and Means Committee, where the bill is being written, support the proposals.
The capital gains rate would increase from 20% to 25% for high-income earners, according to the plan. Individuals would experience the rate at $400,000; households at $425,000; and married couples at $450,000.
Democrats are expected to propose increasing the top marginal tax rate on individuals making $435,000 or more from 37% to 39.6%. The proposal would also impose a 3% surtax on individuals making more than $5 million a year.
The package would also extend the child tax credit included in the Democrats’ $2.1 trillion stimulus package and expand the earned income tax credit. The upcoming markup also carries new regulations on tobacco and private equity industries, as well as cryptocurrency.
The proposals continue debates within the party about the merits of different tax increases, while also setting up a fight with deep-pocketed interest groups who will likely lobby against the efforts.
Democrats are expected to bring up the proposals in committee on Tuesday and Wednesday.
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