President Joe Biden wants higher taxes for big corporations and high earners to “support investments in the U.S. economy” as well as tax relief to ensure that low-income and middle-class families “are not paying more than their fair share,” a top White House economic aide said Tuesday.
During an interview on Bloomberg TV, National Economic Council deputy director Bharat Ramamurti said the president’s tax plan will involve raising taxes on large, multinational corporations and making tax changes that will incentivize domestic rather than foreign investment.
It will also involve higher taxes on “extremely wealthy” individuals making more than $400,000 per year, he said, specifically mentioning those individuals who have profited during the pandemic.
Ramamurti added that Biden does not intend to change the way the United States tax code treats married, head of household or single filers.
He signaled that a couple earning $110,000 would be considered “middle class” and could be included in the group the White House wants to target for tax relief.
Ramamurti said the White House hopes to work with Congress to accomplish Biden’s tax goals, but the administration is likely to face staunch opposition from Republicans who oppose tax hikes of any kind and feel jilted after being excluded from the passage of the $1.9 trillion American Rescue Plan.
“The key here is that the president believes strongly that the biggest corporations and those folks who have done extremely well over the last several decades should pay a bit more,” Ramamurti said.
Biden’s proposed tax hikes will likely be included in the White House’s next major stimulus push: a sweeping infrastructure, jobs and clean energy bill that could be worth as much as $4 trillion. While the $1.9 trillion American Rescue Plan was financed almost entirely with government debt, experts expect Biden’s infrastructure push to be financed in part by tax hikes like the ones Ramamurti described. Raising the corporate tax rate from 21% to 28%, reducing tax benefits for pass-through businesses, raising the income tax rate for individuals earning more than $400,000 per year, expanding the estate tax and raising the capital gains tax for people earning more than $1 million per year are all under discussion, Bloomberg reported Monday.
The Treasury Department is also exploring a global minimum tax on multinational corporations, the Washington Post reported Monday. If successful, that new tax would also provide revenue for Biden’s ambitious fiscal policy agenda.
“The Trojan horse will be called infrastructure, but inside the Trojan horse will be all the tax increases,” Senate Minority Leader Mitch McConnell (R-Ky.) told reporters Tuesday, referring to Democrats’ next major legislative priority. “They want to raise taxes across the board . . . I don’t think there’s going to be any enthusiasm on our side for a tax increase.”
$2.1 trillion. That’s how much federal revenue the tax plan Biden touted during his campaign would raise over the next decade, according to an analysis from the Tax Policy Center.