Democrats unveil tax proposals for the wealthy, corporations to finance spending packages

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WASHINGTON — House Democrats on Monday unveiled a series of proposals to fund the party’s upcoming priorities, along with a series of tax increases on the wealthiest Americans and corporations.

The effort comes as Democrats search for ways to fund their spending proposals, which include massive expansion of the social safety net over family care, public education and climate policies. Taken together, the change will raise about $2.9 trillion in revenue.

Proposals will bring back a tier system for corporate taxes, raising the rate from 21% to 26.5% for corporations with annual revenues of more than $5 million, while reducing it to 18% for companies earning less than $400,000.

All companies with revenue between those brackets would continue to grow at 21%.

The changes for the nation’s wealthiest companies are no more than the 28% proposed by President Joe Biden, or the 39% rate some businesses paid for before 2017. Yet a significant swing vote in the Senate, Sen. Joe Manchin, DW.Va., has said he would only support a 25% corporate tax rate.

Several increases in the corporate tax would reverse the 2017 tax cuts enacted under former President Donald Trump and are considered unattainable by many Republicans. It is unclear whether all Democrats on the House Ways and Means Committee, where the bill is being written, support the proposals.

As per the plan, the capital gains rate will increase from 20% to 25% for those with higher incomes. Individuals will experience a rate of $400,000; home at $425,000; and married couples at $450,000.

Democrats are expected to propose raising the top marginal tax rate from 37% to 39.6% on individuals making $435,000 or more. The proposal would also impose an additional 3% tax on individuals earning more than $5 million annually.

The package will also expand the child tax credit included in the Democrats’ $2.1 trillion stimulus package and expand the earned income tax credit. The upcoming markup features new regulations on the tobacco and private equity industries, as well as cryptocurrencies.

Debate continues within the party about the merits of various tax increases in the proposals, as well as setting up a fight with deep-pocketed interest groups who will lobby against the efforts.

Democrats are expected to bring the proposals to the committee on Tuesday and Wednesday.

Follow Matthew Brown Online @mrbrownsir.

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