We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Politics for Pros- moderated

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: LindyBill3/24/2021 1:40:27 PM
   of 749307 Democrats Weigh Increases in Corporate, Personal Income-Tax Rates
Andrew Duehren and Richard Rubin

WASHINGTON—Democrats are weighing a variety of possible tax increases, including boosting the corporate tax rate and the top marginal income-tax rate on individuals, to raise revenue as President Biden prepares to pitch his infrastructure, climate and education agenda.

White House officials have crafted a preliminary plan that would cost roughly $3 trillion and split the next legislative push into two groups, with one aimed at infrastructure projects such as roads, bridges, and water systems and a second focused on education and antipoverty measures.

The plan also breaks the tax increases into two pieces, proposing to raise taxes on businesses as part of the infrastructure bill and reserving tax increases on high-income households for the second package, according to people familiar with the discussions.

Capital Account
Aides are expected to present the plan to Mr. Biden and his top advisers this week, meaning its details and configuration could change before the White House brings it to leaders on Capitol Hill. Even then, lawmakers will have their own ideas about spending, taxes and the sequencing and packaging of the legislative agenda.

Democrats in Congress have started discussions about tax increases, which they back as a way to pay for programs and combat inequality. House Speaker Nancy Pelosi (D., Calif.) said raising the corporate tax rate and increasing taxes on capital gains were possible options during a meeting last week, according to a senior Democratic aide.

SHARE YOUR THOUGHTSWhat is the best way to fund major infrastructure projects? Join the conversation below.

Senate Majority Leader Chuck Schumer (D., N.Y.) said Tuesday he had a lengthy discussion with White House officials last weekend about the path forward. “There are various, different options that we’re exploring,” he said.

The next legislative push faces a number of headwinds on Capitol Hill, and it is likely to be much more challenging to complete than the $1.9 trillion relief law Mr. Biden signed this month. Many Republicans oppose significant new spending and broad tax increases, while some Democrats are skeptical of tackling tax policy questions alongside other big-ticket items such as infrastructure.

“Trying to tie something as big as real tax reform to this would just bog down the process and not get the funding out to the economy as quickly as necessary,” said Rep. Mark Pocan (D., Wis.), a leader among House progressives.

Republicans are already mobilizing against the potential tax increases, arguing that they would hurt the economy as it recovers from the coronavirus pandemic.

Some progressive Democrats, including Rep. Mark Pocan, left, say tax increases don’t need to be considered alongside infrastructure. Photo: Caroline Brehman/Zuma Press
“To fuel special interest spending, President Biden and congressional Democrats will use any excuse to tax away more of the earnings of American workers, families, and small businesses,” said Rep. Kevin Brady (R., Texas), the top Republican on the House Ways and Means Committee. “That means higher bills and fewer job opportunities, and companies fleeing overseas.”

Many elements of the preliminary tax plan reflect ideas from Mr. Biden’s campaign, including raising the corporate tax rate to 28% from its current 21%, according to the people familiar with the discussions. The White House plan would also increase taxes on companies’ foreign earnings in changes companies say could discourage investment in the U.S. and hurt U.S. companies’ ability to compete in foreign markets.

For the second tranche, the plan would raise the top marginal income-tax rate for high earners and increase taxes on investment gains. During the campaign, Mr. Biden proposed raising the top income-tax rate from 37% to 39.6% and taxing capital gains at roughly the same rate as income for the highest-income households.

He also put forward changes in how assets are taxed at death. Under current law, a capital-gains tax upon sale is only applied to the increase in an asset’s value after the original owner dies—and not the increase in value during the original owner’s life. Mr. Biden proposed applying a capital-gains tax on appreciated assets at death, ending the so-called “stepped-up basis.”

Stimulus Checks Alone May Not Spur Inflation. Here’s What Could

0:00 / 6:51


The IRS sent roughly 90 million stimulus checks to Americans in March. WSJ’s chief economics commentator Greg Ip explains why stimulus checks alone are unlikely to spur inflation. Photo Illustration: Carlos Waters
Mr. Biden, during an interview with ABC’s Good Morning America last week, said his tax increases wouldn’t affect Americans making less than $400,000 a year. His campaign promise on the $400,000 level was regardless of whether people are filing alone or as married couples, meaning that, like current top tax rates, it could include a marriage penalty. He said he was confident Democrats would vote for raising the top marginal income rate and the corporate tax rate.

Some Democrats have questioned whether they even need to raise taxes to pay for the infrastructure bill, given its potential to boost the economy. Treasury Secretary Janet Yellen said Tuesday that longer-term programs should be accompanied by tax increases to pay for them.

“A longer-term plan that addresses critical needs of this economy probably would be accompanied by some revenue raisers,” she said at a House hearing.

During the campaign, Mr. Biden said permanent programs should be paid for. That is a description that fits more with expansions of child care and other items such as tuition-free community college in the second package. The infrastructure in the first package may be seen as partially permanent and partially one-time spending that isn’t paid for.

Lawmakers in both parties have for years said they see infrastructure funding as an area for bipartisan compromise. Because of procedural rules, Democrats likely couldn’t pass both parts of the $3 trillion plan along party lines, meaning they might consider passing part of the proposal with Republican support or consolidating all the spending and tax measures into one large package.

Sen. John Thune (R., S.D.), the No. 2 Republican in the Senate, said Republicans were open to working with Democrats on a package focused on infrastructure investments. But keeping an initial package narrowly focused on infrastructure before crafting another broader package that Democrats could pass along party lines through a process called reconciliation could imperil Republican support for the smaller package, he said.

Sen. John Thune, the No. 2 Republican in the Senate, said Republicans were open to working with Democrats on a package focused on infrastructure investments. Photo: Rod Lamkey - Cnp/Zuma Press
“But if they decide to do that as a ploy to lure Republicans in to vote for the easy stuff and then do all that stuff, the controversial stuff through reconciliation, I don’t think our guys are going to take the bait on that,” Mr. Thune said.

Even if Democrats move forward with tax increases without Republican support, they will still likely need to negotiate the specifics of many of the provisions among themselves. Lawmakers sometimes say they want tax increases to pay for new programs until they start debating the specifics of the tax increases.

Some aides expect that the final product will include smaller tax increases than Mr. Biden proposes, with a corporate tax rate closer to 25%, for example. Given the likely size of the final package, Democrats are unlikely to try to cover its full cost through tax increases.

“Both the amount and makeup of any tax provisions in the infrastructure package are going to be determined by what the moderate Democrats in the Senate can stomach,” said Mac Campbell, a former Democratic aide on the Senate Finance Committee who is now a lobbyist.

—Andrew Restuccia and Kate Davidson contributed to this article.

Write to Andrew Duehren at and Richard Rubin at

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext