President Joe Biden is reportedly preparing to hike taxes on the wealthy in the first major tax increase in 30 years, while the first native American confirmed as Interior Secretary and more top stories in Democratic politics.
Biden will raise taxes on Americans earning more than $400,000 per year
In order to fund the recently approved $1.9 trillion stimulus package, President Joe Biden is reportedly planning to enact the first major increase of federal taxes in nearly 30 years. The tax changes will affect both corporations and high-earning individuals.
Bloomberg first reported the tax increase plan by President Biden, quoting unidentified sources. According to the unnamed sources, the increase in taxes will reflect promises Biden made during his 2020 campaign, The Hill reported.
No tax increase on earners under $400,000
However, White House Press Secretary Jen Psaki said on Monday that President Biden will not increase taxes on Americans earning less than $400,000.
“His priority and focus has always been on people paying their fair share, and also focusing on corporations that may not be paying their fair either,” Psaki said. “That remains his overarching approach, but there isn’t a package yet.”
Increase in corporate taxes
The plan tax increases will raise the current corporate taxes of 21 percent established by the Trump administration in 2017, to 28 percent, according to the report. Prior to Trump lowering taxes, the previous corporate rate had been 35 percent, according to Brookings.
Increased taxes on high-earning individuals
High-earning Americans who make $400,000 or more per year will also see a tax increase under Biden’s plan, which will also alter tax brackets.
Trump’s 2017 tax changes lowered the income brackets, with the top rate falling from 39.6 percent to 37 percent, as well as dropping the 33% bracket to 32%, the 25% bracket to 22%, and the 15% bracket to 12%, Investopedia reported. Both the 10% and the 35% brackets were unchanged.
Under the Trump tax plan, a 35 percent tax was levied on individuals earning $207,351-$518,400. The top bracket levied a 37 percent tax on individuals earning over $518,400.
Under Biden’s reported tax plan, part of the 35 percent bracket and all of the 37 percent bracket would be combined into a higher paying bracket.
Additional tax increases under Biden’s plan
Biden’s plan also includes tax increases on the following: Expansion of the estate tax; reducing tax preferences on pass-through businesses such as limited liability companies; a higher capital gains tax rate for individuals making at least $1 million, The Hill reported.
An independent analysis of Biden’s tax plan conducted by the Tax Policy Center found that it would potentially pay back the stimulus package by raising around $2.1 trillion over 10 years, according to Bloomberg.
Deb Haaland confirmed As the first Native American Secretary of the Interior
Democratic Congresswoman Deb Haaland was confirmed by the Senate in a vote of 51-40 as Interior Secretary, making her the first Native American cabinet secretary in US history, NPR reported.
Haaland is a member of New Mexico’s Laguna Pueblo tribe. This is not the first time she has made US history. In 2018, Haaland became one of the first two Native American women elected to Congress.