Biden Eye’s Tax Hike
President Joe Biden is preparing the first big federal tax hike since 1993 to help pay for a long-term economic package intended as a follow-up to his $1.9 trillion pandemic-relief bill, according to people familiar with the situation. Unlike the $1.9 trillion relief bill, the next plan, which is estimated to be much larger, will not be solely funded by government debt.
It’s becoming clear that tax hikes will be a significant component of President Biden’s next plan. The reported tax hikes include raising the corporate tax rate from 21% to 28%, raising the income tax rate on people earning over $400,000, raising the capital-gains tax rate for people earning at least $1 million a year, and expanding the estate tax.
Biden won’t raise taxes on individuals making less than $400,000 a year, according to White House economist Heather Boushey. In a Bloomberg TV interview Monday, Boushey stated the tax raises are for “folks at the top who have been able to benefit from this economy and haven’t been as hard hit, there’s a lot of space there to think about what kinds of revenue we can raise.”
The proposed tax hikes provide an incentive for the Biden administration not only to finance key programs such as infrastructure, climate change, and increased assistance to poorer Americans but also to fix what Democrats say is unfairness in the tax system.
Do the proposed tax hikes affect you, and if so, do you believe the Biden administration is on the right path?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.