Biden Keeps Campaign Promise, Plans Major Tax Hike

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As Americans look for their $1,400 COVID-19 stimulus checks in the mail this week, President Joe Biden is reportedly planning a major tax hike to help pay for future government spending plans. It would be the first major tax hike since 1993.

According to a Yahoo Finance report, another spending initiative is coming that will be bigger than the $1.9 trillion COVID package. 

The planned tax increases are expected to raise both corporate taxes and individual income taxes.

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Biden’s Tax Increase Plans

Bloomberg says that the new taxes will pay for infrastructure spending, climate change programs, and expanded welfare.

Bloomberg also reports that the plans will likely repeal some or all of President Donald Trump’s 2017 tax cuts.

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Bloomberg includes the following possibilities for the tax hikes:

Raising the corporate tax rate from 21% to 28%.

Raising the income tax rate on individuals earning more than $400,000.

Changing the tax code to be less beneficial to LLCs.

A higher capital gains tax rate.

The package could cost anywhere from $2 trillion to $4 trillion. 

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Biden Keeping Campaign Promise To Raise Taxes

Joe Biden has never made it a secret that he would eliminate the Trump tax cuts and raise taxes if he was elected.

Americans For Tax Reform cites a South Carolina Biden campaign rally in February of 2020 where he told a voter that he would in fact raise taxes:

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Even the recently passed $1.9 trillion COVID Relief package was not without some introductory tax hikes slipped in.

Politico reports that included in that bill was an item that takes away deductions for publicly traded companies that pay top employees more than $1 million. 

Another cracks down on how multinational corporations do their taxes. Yet another targets how owners of unincorporated businesses account for their losses. Together, these items cost around $60 billion.  

The Hill reports that Democrats have expressed some hesitance over new tax hikes.

Sen. Joe Manchin had initially said that he thought repealing Trump’s tax cuts would be “ridiculous,” but now says “Everything’s open for discussion.”

Another scenario that might prove problematic for Democrats is the fact that any tax increases that are passed would not go into effect until 2022, an election year. With Democrats holding just a 5 seat majority in the House, and a 50-50 split in the Senate, that could prove to be risky.

A Democrat House member told The Hill in February that they did not think the Biden administration should be raising taxes right now. “People would accept the corporate tax raised a few points but beyond that you’re going to have problems, especially in the middle of an economic crisis.”

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