Biden gears up to fight for tax hikes on rich and corporate

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U.S. President Joe Biden speaks during a meeting at the Eisenhower Executive Office Building in Washington, DC, the United States on Wednesday, September 15, 2021.

Olivier Contreras | Bloomberg | Getty Images

WASHINGTON – After a tough summer, President Joe Biden is set to spend the fall fighting for tax increases on the rich and on businesses.

The surge in the delta variant of Covid-19, the US withdrawal from Afghanistan, hurricanes, wildfires, evictions and inflation have all shaken Biden’s approval ratings and exhausted staff at the White House.

Now he is shifting his attention to adopting a unique expansion of the social safety net and an infrastructure package.

Biden told the White House on Thursday why Congress needed to raise taxes on wealthier Americans and corporations in order to fund his “Build Back Better” program.

“The data is absolutely clear,” he said. “Over the past 40 years, the rich have gotten richer and too many companies have lost a sense of responsibility to their workers, their communities and the country.”

Biden pointed out the ratio of CEO compensation to average worker compensation, which has grown more than 15-fold over the past five decades.

And in a year when millions of Americans struggled to pay rent and put food on the table amid historic unemployment levels, Biden said the combined net worth of the most rich people had grown by about $ 1.8 trillion.

“How is it possible that the richest billionaires in the country totally escape income tax on what they have earned?” Biden said. “How is it possible for millionaires and billionaires to pay a lower tax rate than teachers, firefighters or law enforcement?”

Progress in the house

The president’s speech comes just a day after the House Ways and Means Committee of the Tax Drafting House voted to move the tax portion of the social safety net bill forward.

The plan increases the top corporate tax rate by 5.5 percentage points and the top personal tax rate by 2.6 percentage points, respectively. If enacted as drafted, the new federal corporate tax rate will be 26.5% and the new top personal tax bracket will be 39.6%.

The proposal also includes a 3% surtax on individual income over $ 5 million and a 25% capital gains tax.

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In addition to tax changes, the Ways and Means Bill includes $ 80 billion in additional funding for the Internal Revenue Service, money Democrats say will improve tax enforcement and help the government raise revenue. hundreds of billions of dollars in tax evaded over a decade.

Biden stressed the need for this funding on Thursday.

“Today in this country, right now, the richest 1%, for example, escape the roughly $ 160 billion in taxes they owe each year,” he said. “No new taxes, taxes they owe.”

“It’s not a level playing field. My plan would help solve this problem. For example, it would give the IRS the resources it needs to keep up with the lawyers and accountants of the super rich.”

Biden also described a more controversial provision that was not included in the Ways and Means Bill, which would require banks to disclose the inflows and outflows of accounts, in order to help the IRS monitor tax evasion.

Next steps

Now that the Ways and Means Committee has moved forward with the fiscal parts of the bill, these move to the House Budget Committee, which will consider them along with the other elements of the eventual bill that have been passed by various. committees.

The Ways and Means Committee vote was the first step in a sprint toward a September 27 deadline that House Democrats have set for votes on the $ 1,000 billion infrastructure bill passed by the Senate and the $ 3.5 trillion safety net bill.

Over the next 11 days, House and Senate Democrats will have to draft, monitor and whip up the most significant changes to federal benefits since Obamacare was passed in 2010.

Biden himself will be at the center of this gigantic effort, both as leader of his party and as a skilled congressional negotiator in his own right.

Any doubts about the president’s involvement in the thick of the legislative battle were dispelled on Wednesday, when Biden held separate private meetings at the White House with the Senate’s two most centrist Democrats, Arizona Senator Krysten Sinema and West Virginia Senator Joe Manchin.

Manchin and Sinema have both expressed skepticism about the size and scope of the social safety net bill. Specifically, Sinema questioned the size of the bill and Manchin expressed concerns about some of the tax hikes.

Biden was due to continue his outreach activities on Thursday, holding phone calls with Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi.

Not a done deal

Biden will need the vote of every Democratic senator to pass the bill along party lines through the 50-50 split Senate, with a decisive vote cast by Vice President Kamala Harris.

Public opinion is a factor in Biden’s favor so far. Americans on the whole support raise taxes on the rich and corporate to finance infrastructure and extend benefits to working families.

But the tax hikes face fierce opposition from business groups like the US Chamber of Commerce and the Business Roundtable, which are willing to spend millions of dollars to fight the hikes.

Already, cracks are appearing in some of the Democrats’ main proposals to generate enough revenue to extend the benefits.

On Wednesday, a plan to give Medicare the power to negotiate prescription drug prices, and thereby save the government billions of dollars, failed the House Energy and Commerce Committee.

Three Democrats joined Republicans in voting against the measure, which the pharmaceutical industry fiercely opposed. After the vote, Democratic leaders began working on a compromise to put Medicare’s bargaining power back into the bill.


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