Taxes may soon be going up for the wealthy, thanks to Joe Biden.
To fund a $3.5tn social spending agenda, the US president wants to implement aggressive tax increases on the wealthy and corporations — far from an easy task.
Let's examine his proposals: on.ft.com/2XFHZyG
Biden has pushed for Americans earning more than $400,000 a year to pay higher taxes in an effort to address income inequality.
He wants to raise the top federal income tax rate to 39.6%. The current rate of 37% is set to expire in 2025 on.ft.com/2XFHZyG
The richest Americans have myriad ways of avoiding high individual tax bills.
Earlier this year, an investigation revealed that billionaires such as Jeff Bezos and Elon Musk paid little to no federal income tax even as their fortunes grew on.ft.com/2XFHZyG
Raising top income tax rates is not sufficient to raise revenue. The rich often make money through capital gains, which are taxed at a lower rate.
Biden is proposing to bring the top rate for long-term capital gains in line with the top income tax rate on.ft.com/2XFHZyG
Corporations are the third largest source of revenue for the US government.
A centerpiece of Trump’s Tax Cuts and Jobs Act was reducing the federal corporate income tax rate from 35% to 21%. Biden wants to reverse the policy and bring it back up to 28% on.ft.com/2XFHZyG
Democrats from states with high property taxes have fought to restore a big tax break that a Republican Congress under Trump dramatically scaled back — the state and local tax, or Salt, deduction.
Currently, the deduction is capped at $10,000 a year on.ft.com/2XFHZyG
More than a dozen Democrats have repeatedly threatened to torpedo Biden’s economic agenda if the Salt cap is not removed, which would overwhelmingly favour the rich.
Almost all of the benefits of removing the cap would go to the richest 20% of households on.ft.com/2XFHZyG
The stakes are high for Biden’s presidency and for Democrats as the 2022 midterm elections approach.
While they have big incentives to maintain party unity, a lobbying frenzy is under way to shape and slash the tax measure in the $3.5tn package on.ft.com/2XFHZyG
Congresswoman AOC says Tax the Rich. Biden plans to. How will his tax proposals affect corporations and wealthy Americans? Play our interactive game: on.ft.com/2XFHZyG
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