Biden seeks increases in income and capital gains taxes for wealthy to pay for $1.8 trillion ‘families plan’
WASHINGTON – President Joe Biden is calling on Congress to raise taxes on wealthy Americans for the first time in nearly a decade to help pay for his ambitious $1.8 trillion plan to provide relief to families and reshape the U.S. economy.
Biden’s American Families Plan, which proposes investing billions of dollars in child care, paid family leave and education, would nearly double the capital gains tax to 39.6% for people earning more than $1 million a year. The current rate is 20%. The package also calls for raising the top marginal tax income rate to 39.5%, up from the current 37% that has been in effect since a tax reform law that congressional Republicans pushed through Congress in 2017. Biden’s proposal will restore the tax rate to the level it was at before the tax reform law.
In addition to raising taxes on the wealthy, the proposal also extends a number of tax credits that the administration says provide needed relief for low- and middle-income families. Biden is expected to lay out his vision for the tax and spending proposal during a speech Wednesday night before a joint session of Congress, his first address before the legislative body since becoming president. A senior administration official who outlined details of the package for reporters on Tuesday said the plan would make sure wealthy Americans pay the taxes they owe and would live up to Biden’s campaign promise that no one earning less than $400,000 a year will see their taxes go up. The American Families Plan is the companion piece to a $2.3 trillion infrastructure and jobs package, dubbed the American Jobs Plan, that Biden proposed earlier this month. Between the jobs package and the families plan, Biden is looking to spend more than $4 trillion – a figure that he calls a once-in-a-generation investment to restructure the American economy.
But getting the proposal through Congress could be the biggest challenge of Biden’s new presidency. Democrats hold small majorities in the House and Senate, giving them scant room for political maneuvering in the face of what is expected to be strong GOP opposition to the plan.