US Democrats propose tax hikes
The effort is intended to raise nearly US$3 trillion in new revenue to help defray the cost of President Joe Biden's enormous spending package.
15 September 2021 | Economics
The cost of living is skyrocketing for American families. House Republicans
The effort is intended to raise nearly US$3 trillion in new revenue to help defray the cost of President Joe Biden's enormous spending package, which amounts to a dramatic expansion of the social safety net and other public investments currently totalling some US$3.5 trillion.
According to a plan circulated by the Democratic leadership of the tax-drafting House Ways and Means Committee, tax rates for America's top-tier earners would rise from 37% to 39.6%.
The rate for businesses with more than US$5 million in annual revenue would jump from 21 percent to 26.5%.
The corporate hike is less ambitious than the 28% rate proposed by Biden, but higher than the 25% preferred by centrist Democratic Senator Joe Manchin.
Negotiations therefore are set to continue in the Democratic camp as they seek consensus in the coming weeks. The corporate tax rate was lowered dramatically, from 35% to 21%, during Republican Trump's major tax overhaul in 2017.
Republicans are fiercely opposed to the Democrats' proposals, but Biden's party is using a fast-track procedure that would allow the majority Democrats to pass the reforms with their votes alone.
Given their razor-thin majorities in both the Senate and House of Representatives, Democrats must reach a delicate consensus in their caucus between the left flank and more moderate members.
"The cost of living is skyrocketing for American families. What are House Democrats doing about it? They are attempting to pass 'the biggest tax increase in decades,'" House Republicans tweeted, citing an article by Politico.
Branded "Build Back Better," Biden's plan is intended to "transform" American society by instituting universal pre-kindergarten, reducing child care costs, improving health care access, boosting investments in public housing, legalizing millions of migrant workers, and expanding measures to fight climate change.
Democratic leaders have given various congressional committees until Wednesday to present their detailed portions of the package. - Nampa/Reuters