To fund their $3.5 trillion budget bill, House Democrats are set to propose increasing the corporate taxes to 26.5%, following short of Biden’s goal, while also targeting wealthy individuals, tobacco, and cryptocurrency.
In order to raise the revenue necessary to fund the $3.5 trillion budget package, House Democrats are seeking to impose higher taxes on corporations, wealthy Americans, tobacco, cryptocurrency, and more.
First up in the proposal is raising the corporate tax rate to 26.5%, up from the current 21%. However, that number falls 1.5% short of the 28% president Joe Biden had sought, Bloomberg reported.
A draft proposal also seeks to increase the top marginal rate on wealthy individuals to 39.6%, up from 37%, CNN reported. The top rate would apply to individuals earning over $400,000 a year or married couples filing jointly earning over $450,000 annually.
The additional tax on high-income individuals is estimated to raise approximately $1 trillion. In addition, a 3% surtax would be levied on individuals with adjusted gross incomes over $5 million.
Under the proposal, the top tax rate on capital gains would increase from 20% to 25%, falling significantly short of the 39.6% Biden proposed.
All totaled, the various taxation revisions are anticipated to raise an estimated $2.9 trillion.
However, despite all these increases, the proposal by the House Ways and Means Committee claims that most Americans will not be impacted by the tax hikes. In a statement by spokesperson Andrew Bates says the plan:
“Meets two core goals the president laid out at the beginning of this process – it does not raise taxes on Americans earning under $400,000 and it repeals the core elements of the Trump tax giveaways for the wealthy corporations that have done nothing to strengthen our countries economic health.”
Other proposals by House Democrats seek to increase the revenue stream for the federal government and its social spending package by taxing a number of other sources.
Already heavily taxed tobacco will be subject to further taxation, for example, with higher taxes and on nicotine products including e-cigarettes.
Democrats propose treating cryptocurrency in the same manner as other financial instruments to raise an estimated $16 billion. A number of rules are proposed to be modified, including making cryptocurrency subject to wash sale and disguised sale rules.