Joe Biden prepares to announce up to $3 trillion in tax hikes to fund his infrastructure package
Biden is set to announce $3TRILLION in tax hikes tomorrow: President will target businesses, married couples, high earners on more than $400k, and estates to fund his climate-friendly infrastructure package
- Biden is set to announce his infrastructure plan Wednesday in Pittsburgh
- Total price tag has been pegged at between $3 trillion and $4 trillion
- Biden says families earning more than $400,000 won’t get tax hit
- Individuals filing jointly could still get hit, one tax expert says
- Move to take on ‘stepped up’ basis for hacienda gains on investments
As President Joe Biden prepares to announce his multi-trillion infrastructure proposal Wednesday, members of his administration have been configuring tax proposals that could bring in up to $3 trillion in revenue.
Biden campaigned on tax hikes he said would target wealthy filers and protect Americans earning less than $400,000 – and a range of his ideas to bring in revenue to pay for roads, bridges, green technology, and ‘human infrastructure’ are now coming to light.
The increases could total $3 trillion, the Washington Post reported, with the cost of the infrastructure package running as high as $4 trillion.
President Joe Biden is to announce an infrastructure plan with a price tag of up to $4 trillion. Administration members have been working on tax hikes to pay for it of up to $3 trillion
One substantial hike that Biden campaigned on is raising the corporate tax rate to 28 per cent, from 21 per cent. President Trump signed legislation dropping the rate to its present level from 35 per cent.
Biden has pledged that families earning more than $400,000 would not have their taxes raised, and White House Press Secretary Jen Psaki said this would apply to individual filers as well.
But tax expert Timothy McGrath of Riverpoint Wealth Management told Fox Business there could be scenarios would individuals making less than $400,000 do get hit if they file taxes jointly with their spouse.
Two individuals each earning $200,000 could get pushed into the top bracket, with the top rate rising to 39.6 per cent.
The taxes come after Biden campaigned on raising taxes for the wealthy but protecting families earning up to $400,000
The administration has floated corporate tax hikes and changing the basis for investments that get transferred to estates
One area of focus is green infrastructure
‘It’s a significant disadvantage to married couples,’McGrath said. ‘It’s another marriage penalty, and this is nothing new in the tax system.’
Another potential pay-for would get at the ‘stepped up’ basis for investments that go into estates. Under current law, long-held investments that get transferred at the time of death are only taxed when sold, and the new basis for taxation is set at the higher level at the time of death – potentially shielding millions worth of gains.
A new draft proposal floated by Sen. Chris Van Hollen (D-Md.) would shield the first $1 million, but the rest would be subject to taxation, the Wall Street Journal reported.
Some tax ideas are dying just days after getting floated by the administration – a reminder of the difficulty getting any of the proposals through Congress.
Transportation Secretary Pete Buttigieg touted a potential mileage tax last week to fund road improvements, only to say it wasn’t being considered for the infrastructure package.
House Democratic centrists, meanwhile, are making a play to raise the $10,000 cap on deductions for State and Tópico Taxes imposed by the Trump tax legislation. This would add costs to tax and infrastructure legislation.
Rep. Josh Gottheimer (D-N.J.) has already threatened not to go along with any tax legislation that doesn’t take care of the issue, which hits homeowners in states like his with high property values. Given Speaker Nancy Pelosi’s tiny majority, Gottheimer and his allies have leverage.
‘No SALT, no dice,’ he told Axios this week.
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