WASHINGTON — House Democrats on Monday unveiled a sweeping proposal for tax increases on large corporations and the wealthy to fund President Joe Biden’s $3.5 trillion Reconstruction plan, as Congress sweeps away a far-reaching package touching almost all aspects of domestic life. proceeds to shape.
The proposed top tax rate on couples earning more than $450,000 would drop back to 39.6%, and wealthy Americans would have a 3% tax on those earning more than $5 million a year. For larger businesses, the proposal would increase the 21% corporate tax rate to 26.5% on income over $5 million.
Overall, the tax increase is in line with Biden’s own proposals and will bring about the most significant changes to the tax code since Republicans along with then-President Donald Trump cut taxes in 2017. Business and anti-tax groups are sure to object. But Democrats are leading the way.
Representative Richard Neill, D-Mass., chairman of the Tax-Writing Ways and Means Committee, said that taken together, the proposals “will expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.” will support.”
It is a difficult moment for Biden and his allies in Congress as they assemble a massive package that will become one of the largest single measures to be considered in some time. The president’s “build back” agenda includes spending on child care, health care, education and strategies to combat climate change. This is a massive undertaking with the Great Society or the New Deal.
A Democratic senator critical of the bill’s fate says the cost would need to be reduced from $1 trillion to $1.5 trillion to win his support.
Sen. Joe Manchin, DW.Va., also cautioned that there is “no way” Congress will meet the end-September target from House Speaker Nancy Pelosi, D-Cal., given its current widening differences with liberal Democrats. How much to spend and how to pay for it.
“I can’t support $3.5 trillion,” Manchin said on Sunday, citing specifically his opposition to a proposed increase in the corporate tax rate from 21% to 28% and huge new social spending. “We don’t need to rush into it.”
Democrats have no vote if they want to implement Biden’s massive “Build Back Better” agenda, the Senate is split 50-50 and Vice President Kamala Harris is the tiebreaker if there is no Republican support. Democratic congressional leaders have set Wednesday for committees to draft the bill.
Deputy Press Secretary Andrew Bates said the White House welcomed the initial tax plan, which “makes significant progress toward ensuring our economy rewards work, not just money.”
“It accomplishes two main goals set by the president at the beginning of this process – it does not raise taxes on Americans earning less than $400,000, and it repeals the core elements of paying Trump taxes for the wealthy and corporations,” He said in a statement.
The proposal was touted as potentially raising $2.9 trillion – but this is a preliminary estimate. This will go a long way toward paying off the $3.5 trillion law. The White House is relying on the long-term economic growth sparked by legislation to generate an additional $600 billion to fill the gap.
Most of the revenue raised will come from higher taxes on corporations and the highest earners — more than $450,000 for married couples filing jointly, up 39.6% from the current 37%.
Repeatedly pressured about a price tag that it might support, Manchin said, “it’s going to be $1, $1.5 (trillion).” He suggested that the limit was based on a modest 25% increase in the corporate tax rate, a figure he believes will keep the US globally competitive.
But Sen. Bernie Sanders, the Vermont Independent, who chairs the Senate budget committee and is helping draft the measure, said he and other members of the liberal party in Congress initially raised even more than $6 trillion. Strong package was requested.
“I don’t think it’s acceptable to the president, the American people, or the overwhelming majority of people in the Democratic caucus,” Sanders said. He continued: “I believe that we will all sit down and work together and come up with a $3.5 trillion reconciliation bill that deals with the most unmet needs of working families.”
Existing blueprints propose to rebuild infrastructure, tackle climate change and expand or launch a range of services from free preschools to dental, vision and hearing aid care for older people.
Manchin voted last month to approve a budget proposal that set the figure, though he and Sen. Kirsten Cinemas, D-Ariz., have expressed reservations about the topline amount. All of this would be paid for with taxes on corporations and the wealthy.
Congressional committees are working hard on a 10-year proposal slice this month to meet this week’s deadline to draft the bill from Pelosi and Senate Majority Leader Chuck Schumer, D.N.Y. Pelosi is seeking a House vote by October 1 near the September 27 deadline to vote on the slimmer infrastructure plan backed by liberal lawmakers.
Munchkin, who in an op-ed earlier this month urged a “strategic pause” on the law to reconsider the cost, called the timing unrealistic. He has urged Congress to act on a $1 trillion bipartisan infrastructure bill already passed by the Senate. But moderate Democrats have threatened to withhold their support unless a bill to spend $3.5 trillion with it is passed.
Manchin spoke on CNN’s “State of the Union,” NBC’s “Meet the Press” and ABC’s “This Week.” Sanders was on CNN and ABC.
Associated Press writer Marcy Gordon contributed to this report.