President Biden is gearing up for a joint session to Congress next week by preparing the outline in the next steps of his economic agenda. The proposal is expected to include the forthcoming American Family Plan that will include new taxes on the wealthiest Americans.
Biden’s new plan is expected to nearly double the capital gains tax for people who make more than $1 million per year by taxing it like wages and salaries. The plan will also raise the top marginal income tax rate from 37% to 39.6% for households making $400,000 or more in income.
The changes are a concept Biden has proposed to reward “work, not wealth.”
The President has promised not to raise taxes on the 90% of citizens that make less than $400,000 each year.
Biden’s plan would solidify his campaign promise to raise taxes on the wealthiest Americans and corporations in order to fund the American Family Plan, which will cost around $1 trillion.
The plan will be centered on child care, paid family leave, education funding (like free community college tuition) and other domestic issues, the details on these “human infrastructure” issues will be released early next week.
Details of the plan have not been finalized and could still change before its introduction next week. The President continues to hold meetings with aides to iron out the details.
The initial part of the plan is designed to help the economy recover from the Covid-19 pandemic and is slated to focus on infrastructure and jobs. The infrastructure plan would shift the nation to greener energy over the next eight-year.
President Biden plans to pay for the first phase of the recovery package by raising corporate taxes. The corporate income tax rate would be raised from 21% to 28%. President Trump’s administration had the rate as high as 35% before congressional Republicans cut taxes in 2017.
The Biden administration says raising the corporate tax rate would raise more than $2 trillion over the next 15 years. The President has said he is open to negotiating or compromising over how to pay for the bill and is currently holding meetings with bipartisan lawmakers at the White House
The process of getting the legislation through Congress could take months. Democrats, while holding a slim majority, are not united on the best path forward, and many Republicans are unhappy with the cost of the plan and the possible corporate tax hike.
The President has warned lawmakers that if the proposal does not gain enough bipartisan support, he would attempt to move forward with the same process that allowed him to pass the Covid-19 relief package without any Republican votes. That process would only require a majority instead of 60 votes in the Senate.