40%: Biden's Plan To Raise Taxes & Minimum Wage Will Have Huge Impact On Average Americans

Written By BlabberBuzz | Monday, 18 January 2021 16:30

President-elect Joe Biden and congressional Democrats have revealed plans to raise taxes on wealthy individuals and firms, but vital obstacles remain even with Democratic majorities in the House and Senate.

This month’s Democratic wins in Senate runoffs in Georgia, giving Democrats control of the Senate for the first time since 2014, increases the odds of tax proposals pushing through Congress. However, slim margins in both the House and the Senate mean passing tax increases will be a hard task.

“Getting them to agree on a legislative proposal will not be easy,” said Jorge Castro, a former congressional aide and counselor to the IRS commissioner during the Obama administration who now works on tax law at Miller & Chevalier.

Biden’s campaign tax proposals included rolling back President Trump’s 2017 tax-cut law for taxpayers with income above $400,000, taxing capital gains at the same rates as regular income for people with income above $1 million, and increasing the corporate tax rate from 21 percent to 28 percent.

Democrats extensively think that wealthy people and corporations are not paying enough in taxes. A discussion over how best to raise taxes on the rich was front and center during the Democratic presidential primary, with some Democratic candidates, such as Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.), taking more aggressive stances than Biden and calling for a wealth tax.

The benefits of any tax increases on the wealthy grew after Democrats won the Georgia runoffs. The victories will give Democrats and Republicans every 50 seats in the Senate, with Vice President-elect Kamala Harris having the tie-breaking vote.

Sen. Ron Wyden (D-Ore.), the incoming chairman of the tax-writing Senate Finance Committee, said on a call with reporters Wednesday that increasing taxes on the wealthy and businesses was among his priorities.

Wyden in 2019 released a proposal to tax high-income people’s investment gains yearly rather than when the investments are sold. He said he intends to do extra work on this program.

“If you are a nurse in America taking care of COVID patients, you don’t get to defer paying your taxes. But if you’re a billionaire, you can defer, defer, defer some more and then pretty much never pay any taxes at all,” he said. “My plan would put a stop to that.”

Wyden also said he wants to revert “corporate tax giveaways” in Trump’s 2017 law as well as the cuts for high earners. Moreover, he said he wants to finish the carried interest “loophole” that benefits investment-fund managers, and better target a tax deduction for income from non-corporate businesses created by Trump’s law.

Biden, however, does not appear keen to push through his revenue-raising campaign plans. Instead, he is focusing on immediate coronavirus relief legislation, with provisions aimed at decreasing taxes for low- and middle-income households.

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