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Democrats in the House Suggest Increase in Corporate Taxation
House Democrats are in the process of drafting a substantial spending package that aims to enhance social safety nets. This new proposal is expected to come with a significant price tag, and to facilitate its execution, the wealthiest corporations and individuals in America will be required to contribute more.
Currently, there are two separate proposals being developed – one from the House Democrats themselves and another put forth by the Ways and Means Committee. The House’s proposal involves raising the corporate tax rate to 26.5%, while the highest-earning individuals may face a tax increase of up to 39.6%. The plan introduced by Chair Richard Neal from the Ways and Means Committee mirrors this but adds a 3% surtax on individuals earning more than $5 million annually, along with a hike in the capital gains rate to 28.8%.
If implemented in its current state, this initiative would mark the most substantial tax increase in several decades of American history. However, the plan is designed to specifically target those earning over $400,000 annually, with only the top 1% bearing the full impact.
Senior House Democrats are converging on a preliminary proposal that could generate up to $2.9 trillion to cover a large portion of President Biden’s expansion of the social safety net by raising taxes on the wealthiest corporations and individuals. https://t.co/GbII9Efjga
— The New York Times (@nytimes) September 13, 2021
“This fulfills two fundamental objectives set out by the President at the outset of this process – it avoids taxing individuals earning below $400,000 and rescinds the core provisions of the tax advantages for the wealthy and corporations instituted during the Trump administration, which have not contributed to the betterment of our country’s economic well-being,” stated White House spokesperson Andrew Bates in a release.
“The President is eager to collaborate further with Chairman Neal, as well as the Senate Finance Committee and Chairman Wyden, as we move forward with the Build Back Better agenda.”
The Democrats’ reconciliation package must be finalized by an internal deadline of September 15.
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