Corporations will be front and center as President Joe Biden seeks to raise taxes, according to a new report.
According to Axios, Biden will focus on four major tax increases as he looks for ways to fund infrastructure and social welfare programming. Collectively, the major areas would provide $1.8 trillion toward spending plans that range from $3 trillion to $5 trillion.
The biggest hit will be an increase in the corporate tax rate from 21 percent to 28 percent. The increase would raise $730 billion over 10 years, according to the Tax Policy Center.
Under former President Donald Trump’s tax cuts, the corporate rate was cut from 35 percent to 21 percent, according to CNBC.
Biden also wants corporations to pay a global minimum tax on profits from foreign subsidiaries, which could rake in $550 billion.
Investors would be targeted by a Biden proposal to tax capital gains as regular income for high-income Americans and also tax unrealized capital gains when an investor dies, which would yield $370 billion.
Biden also wants to increase the tax rate for Americans making more than $400,000 to 39.6 percent, which could raise up to $110 billion.
Democrats have spent several years clamoring to raise taxes on corporations and the rich to combat widening economic inequality.
Now, under President Biden, they have a shot at ushering in the largest federal tax increase since 1942. https://t.co/52V3ayZkAN
— The New York Times (@nytimes) March 27, 2021
In an analysis that appeared on the Cato Institute, Scott Lincicome noted Biden seems focused on undoing the Trump tax cuts, which he said could be better politics than economics.
He wrote the Trump tax cuts “moved the United States in the right direction — from one of the highest corporate tax jurisdictions in the world to one that is today at least competitive with most of the developed world, in terms of both the basic tax rates on paper and the actual tax burdens imposed on U.S. corporations.
“These reforms are consistent with oodles of research showing how high corporate tax rates discourage investment, economic growth, and innovation, while likely burdening U.S. workers and consumers more than those fat??cat capitalists we all (apparently) love to hate.”
“Biden’s corporate tax plans, assuming they make it into whatever final package Congress will consider, would undo these recent improvements, raising rates and adding complexity and uncertainty at a precarious moment for the U.S. economy,” he wrote.
Others are also lining up against the Biden tax increase.
This week Biden is expected to unveil a $3.5 TRILLION dollar tax hike.
The middle class, without a doubt, is going to bear the burden of these job-killing tax increases.
I guess massive tax hikes are his version of promises made, promises kept.
— Lauren Boebert (@laurenboebert) March 30, 2021
“He wants a massive tax increase and he wants to allocate the tax responsibility in this country, on the basis of class,” said Republican Sen. John Kennedy of Louisiana, according to The New York Times. “That’s a hell of a way to make tax policy. Sound tax policy is made on the basis of economics.”
Even some moderate Democrats are squeamish.
“We need to be careful not to do anything that’s too big or too much in the middle of a pandemic and an economic crisis,” said Democratic Rep. Josh Gottheimer of New Jersey, according to Axios.
“It’s got to be responsible and both parties need to be at the table. This can’t just be jammed through without input and consideration from the other side.”