Biden Eyes First Major Tax Hike since 1993

With the $1.9 Trillion COVID-19 stimulus funding relying on government debt, President Joe Biden now plans to increase the tax rate for individuals and corporations. This tax increase aims to fund infrastructures, climate change, help poor Americans, and change the system’s inequalities. Implementing these tax hikes will repeal Donald Trump’s 2017 tax laws that benefited wealthy individuals and large corporations. Some provisions include:

● Corporate tax rate raised from 21% to 28%

● Raising income tax rate for individuals earning more than $400,000

● Higher capital gains tax for individuals earning at least $1 Million each year

With these changes, the prediction of capital raise is about $2.1 Trillion over the course of a decade. However, the actual value may be much smaller. Democrats would need at least 10 Republicans in their favor to implement these changes, which may prove to be difficult. Ken Kies, managing director of the Federal Policy Group, explains that the partisan environment is much more severe than in 1993, when the last big tax hike occurred during the Clinton Administration, implying that agreements will be much harder to come by. If these tax measures are passed, then they will likely take effect by 2022. Some tax initiatives might be easier for Republicans to get behind, such as the shift from the gas tax to the vehicle-miles-traveled fee for highway funding, raising capital for the Internal Revenue Service enforcement, and the potential revision of tax laws to halt U.S. companies from offshoring jobs to raise revenue.

Source: https://www.accountingtoday.com/articles/biden-eyes-first-major-tax-hike-since-1993-in-next-economic plan

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