clearn.png
Saturday September 25th, 2021 11:36PM

Democrats seek corporate, wealthy tax hikes for $3.5T plan

By The Associated Press
Related Articles
  Contact Editor

WASHINGTON (AP) — House Democrats unveiled a sweeping proposal for tax hikes on big corporations and the wealthy to fund President Joe Biden's $3.5 trillion rebuilding plan, as Congress speeds ahead to shape the far-reaching package that touches almost all aspects of domestic life.

The proposed top tax rate would revert to 39.6% on individuals earning more than $400,000, or $450,000 for couples, and there would be a 3% tax on wealthier Americans with adjusted income beyond $5 million a year. For big businesses, the proposal would lift the corporate tax rate from 21% to 26.5% on incomes beyond $5 million, slightly less than the 28% rate the president had sought.

In all, the tax hikes are in line with Biden’s own proposals and would bring about the most substantive changes in the tax code since Republicans with then-President Donald Trump slashed taxes in 2017. Business and anti-tax groups are sure to object. But Democrats are pressing forward.

Rep. Richard Neal, D-Mass., the chairman of the tax-writing Ways & Means Committee, said Monday the proposals, taken together, would “expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.”

It's an opening bid at a daunting moment for Biden and his allies in Congress as they assemble the massive package that is expected to become one of the largest single domestic policy measures considered in decades. The president's “Build Back Better” agenda includes spending on child care, health care, education and strategies to confront climate change. It is an ambitious undertaking on par with the Great Society or New Deal.

Republican critics decry the sweep of Biden's plan, suggesting it slopes toward a Western European-style socialism, and they particularly reject the taxes required to pay for it, bristling because it would reverse the GOP tax cuts that were approved just a few years ago.

Senate Republican leader Mitch McConnell said the proposal is “the last thing American families need.” All GOP lawmakers are expected to vote against it.

But Republicans are largely sidelined as Democrats rely on a budget process that will allow them to approve the proposals on their own, if they can muster their slight majority in Congress.

Democrats have no votes to spare to enact Biden’s agenda, with their slim hold on the House and the Senate split 50-50 and Vice President Kamala Harris the tiebreaker if there is no Republican support. Democratic congressional leaders have set a target of Wednesday for committees to have the bill drafted.

One Democratic senator vital to the bill’s fate says the cost will need to be slashed to $1 trillion to $1.5 trillion to win his support.

Sen. Joe Manchin, D-W.Va., has suggested it's time for a “strategic pause,” and cautioned there was “no way” Congress will meet the late September goal from House Speaker Nancy Pelosi, D-Calif., for passage, given his wide differences with liberal Democrats on how much to spend and how to pay for it.

“I cannot support $3.5 trillion,” Manchin said Sunday, citing in particular his opposition to raising the corporate tax rate above 25%, a figure he says will keep the U.S. globally competitive.

Manchin is not alone, as other centrist lawmakers have raised concerns. Restive Democrats from high-tax, heavily Democratic states like New York, New Jersey and California are pushing for a repeal of the $10,000 cap on state and local tax deductions that was imposed by the 2017 Trump law. Neal indicated Monday that the issue is under serious consideration.

Finding compromise will be a daunting project as progressives, including Sen. Bernie Sanders, I-Vt., are angling for the most robust package possible. As chairman of the Budget Committee helping to write the bill, Sanders has noted that he and other members of the liberal flank had initially urged an even more robust package of $6 trillion.

“For me, this is not a particular number, but it is making sure that we meet this moment,” said Rep. Katherine Clark, D-Mass., a member of House leadership. “The pandemic has shown us that we cannot continue to have an economy of haves and have nots.”

The White House welcomed the preliminary tax plan, which keeps to Biden's promise not to tax anyone making less than $400,000. The proposal “makes significant progress towards ensuring our economy rewards work and not just wealth,” said deputy press secretary Andrew Bates.

The House, Senate and White House are working together to align their plans ahead of this month's deadlines, though some differences are emerging that will need to be resolved.

The House tax proposal was pitched as potentially raising some $2.9 trillion, a preliminary estimate — but it would go a long way toward paying for the $3.5 trillion legislation. The White House is counting on long-term economic growth from the plan to generate an additional $600 billion to make up the difference.

Much of the revenue raised would come from the higher taxes on corporations and the highest earners, increasing the individual tax rate to 39.6% from the current 37%.

Looking at wealthy individuals, Neal is proposing an increase in the top tax rate on capital gains for those earning $400,000 a year or more, to 25% from the current 20%. Exemptions for estate taxes, which were doubled under the 2017 Trump tax law to now $11.7 million for individuals, would revert to $5 million.

Also proposed are increases in the tax rate on tobacco products and a new tax on non-tobacco nicotine delivered by e-cigarettes.

The broader blueprint from Democrats proposes spending billions for rebuilding infrastructure, tackling climate change and expanding or introducing a range of services, from free prekindergarten to dental, vision and hearing aid care for older people.

Congressional committees are hustling to wrap up their work to meet this week’s timeline from Pelosi and Senate Majority Leader Chuck Schumer, D-N.Y., to have the bill drafted. Pelosi is seeking a House vote by Oct. 1, and it would then go to the Senate. That's near the Sept. 27 timeline for voting on a slimmer infrastructure plan favored by moderate lawmakers.

___

Associated Press writers Hope Yen and Josh Boak contributed to this report.

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Online Headlines - Washington, AP Online Congress News, AP Business, AP Business - Corporate News
© Copyright 2021 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
School starts for 1 million NYC kids amid new vaccine rules
Classroom doors are swinging open for about a million New York City public school students in the nation’s largest experiment of in-person learning during the coronavirus pandemic
12:09PM ( 26 minutes ago )
Democrats seek corporate, wealthy tax hikes for $3.5T plan
House Democrats are unveiling a sweeping proposal for tax hikes on big corporations and the wealthy to fund President Joe Biden’s $3.5 trillion rebuilding plan
12:03PM ( 32 minutes ago )
Blinken readies for contentious Afghan hearings in Congress
Secretary of State Antony Blinken is preparing to face tough congressional questioning this week over the Biden administration's handling of the military withdrawal from Afghanistan
11:58AM ( 37 minutes ago )
Associated Press (AP)
Capitol rally seeks to rewrite Jan. 6 by exalting rioters
Allies of former President Donald Trump are calling those charged in the Jan_ 6 riot at the U_S_ Capitol “political prisoners.”
11:31AM ( 1 hour ago )
Donors voice concerns over Taliban rule as UN seeks funds
The United Nations is hosting a high-level donors conference to drum up emergency funds for Afghanistan after the Taliban takeover of the country
11:10AM ( 1 hour ago )
Report: Climate change could see 200 million move by 2050
Climate change could push more than 200 million people to move within their own countries in the next three decades and create migration hot spots unless urgent action is taken in the coming years to reduce global emissions and bridge the development gap
11:09AM ( 1 hour ago )
AP National News
North Korea says it tested new long-range cruise missiles
North Korea says it has successfully tested newly developed long-range cruise missiles over the weekend
6:28AM ( 6 hours ago )
Energized pope cracks jokes, greets fans in Slovakia
Pope Francis is cracking jokes and clearly enjoying the enthusiasm of Slovakia on his first full day in the country
6:28AM ( 6 hours ago )
House Democrats post record August fundraising ahead of 2022
The campaign organization aiming to maintain Democratic control of the House in the 2022 midterm races raised $10 million last month
6:00AM ( 6 hours ago )
AP Online National News
Bieber wins artist of the year at star-packed MTV VMAs
“Bieber fever” has made its presence felt at a star-studded 2021 MTV Video Music Awards
10:40PM ( 13 hours ago )
4 injured after apartment building explosion near Atlanta
An explosion rocked an apartment building in suburban Atlanta, causing the three-story complex to partially collapse and leaving four people with minor injuries
9:47PM ( 14 hours ago )
Barrett concerned about public perception of Supreme Court
Supreme Court Justice Amy Coney Barrett is expressing concerns that the public may increasingly see the court as a partisan institution
9:46PM ( 14 hours ago )
Top General short headlines
US steps up effort to unite families separated under Trump
The Biden administration is stepping up its effort to find and unite migrant families forcibly separated under President Donald Trump
11:17AM ( 1 hour ago )
3 contrasting candidates seek chancellery in German election
Germany is seeing its first three-way contest for the chancellery, with the environmentalist Greens joining the country’s two traditional big parties in fielding a candidate for the top job
2:38AM ( 9 hours ago )
5 questions about California's recall targeting Gov. Newsom
The California recall is the first major election since Joe Biden became president, and its results may hint at the political trajectory of the country
12:07AM ( 12 hours ago )
AP Online Headlines - Washington
In the GOP, voter ID is a slam dunk ... except in Nebraska
Conservative activists in Nebraska are turning to voters to enact a voter identification requirement, an issue that state lawmakers have blocked multiple times even though it's now common in other Republican-led states
7:01PM ( 1 day ago )
Could Texas abortion ban strategy be double-edged sword?
The unusual legal strategy used to ban most abortions in Texas is already increasingly being employed in Republican-led states to target pornography, LGBT rights and other hot-button cultural issues
3:48PM ( 1 day ago )
White House, Democrats tangle over Biden bid to raise taxes
Don't focus on the bottom line
8:44AM ( 2 days ago )
AP Online Congress News
Stocks rise broadly in early trading following dismal week
Stocks are rising broadly in morning trading on Wall Street Monday as the market regains a more solid footing following its biggest weekly drop since June
10:23AM ( 2 hours ago )
UK OKs vaccines for 12 year olds, aims to avoid lockdowns
Britain’s chief medical officers say children aged 12 to 15 should be vaccinated against the coronavirus
9:51AM ( 2 hours ago )
Stocks open higher on Wall Street; tech, energy lead gains
Stocks are opening broadly higher on Wall Street Monday as the market regains a more solid footing following its biggest weekly drop since June
9:46AM ( 2 hours ago )
AP Business
Britain ends contract with French startup for vaccines
A French pharmaceutical startup says the British government has abruptly terminated an agreement for it to supply tens of millions of COVID-19 vaccines
4:51AM ( 7 hours ago )
Epic Games appeals ruling in lawsuit alleging Apple monopoly
Epic Games filed notice that is appealing a federal judge’s decision in a lawsuit alleging that Apple has been running an illegal monopoly that stifles competition
5:29PM ( 19 hours ago )
Newsom, GOP rivals seek votes in recall's final weekend
California Gov. Gavin Newsom and his Republican rivals are making their final pitches to voters as the recall against the governor winds to a close
9:26PM ( 1 day ago )
AP Business - Corporate News
School starts for 1 million NYC kids amid new vaccine rules
Classroom doors are swinging open for about a million New York City public school students in the nation’s largest experiment of in-person learning during the coronavirus pandemic
12:09PM ( 27 minutes ago )
Blinken readies for contentious Afghan hearings in Congress
Secretary of State Antony Blinken is preparing to face tough congressional questioning this week over the Biden administration's handling of the military withdrawal from Afghanistan
11:58AM ( 38 minutes ago )
Biden to survey wildfire damage, make case for spending plan
President Joe Biden will promote his administration’s use of the Defense Production Act to aid in wildfire preparedness during a Western swing in which he’ll survey wildfire damage California and meet with fire officials in Idaho
11:55AM ( 41 minutes ago )
Crews in southern Spain face 'complex' wildfire for 5th day
Firefighting crews near southern Spain's Costa del Sol were hoping much-needed rainfall to help them extinguish a major wildfire that has ravaged 7,700 hectares (19,000 acres) in five days and forced 2,600 to evacuate
11:52AM ( 44 minutes ago )
No bull: Scientists potty train cows to use 'MooLoo'
Researchers in Germany have potty trained cows, all in the name of science
11:45AM ( 51 minutes ago )