Thread by @MorningBrew

House Democrats are scrambling to cover the bill for their pricey $3.5 trillion budget proposal.

A thread explaining the plan they released yesterday that includes about $2.9 trillion in tax hikes.

Reality check: Unless you’re the CEO of Target or clutching your third boat, you won’t be targeted by the increases, which aim to raise money from corporations, wealthy Americans, and investors.

Here are some of the deets:

1. For bigger, profitable companies, the corporate tax rate would jump to 26.5% from 21% currently.

2. Americans who earn more than $435,000 per year would see their top tax rate increase from 37% to 39.6%.

3. Individuals earning over $5 million would get hit with a 3% surtax.

4. The top capital gains rate (taxes on the sale of stocks, real estate, NFTs of gorillas) would jump from 20% to 25%.

On the spicy scale, this plan is mild

While it reverses many of the Republican tax cuts for 2018, the plan stops short of the ambitious tax hikes President Biden first proposed.

For instance, Biden initially wanted to bump the corporate rate up to 28% (26.5% in the new plan) and the top capital gains rate to 39.6% (25% in the plan).

And the proposal doesn’t include a tax on billionaires’ investments, where most of their wealth is tied up.

This tax proposal is seen as an olive branch to moderate Democrats who don’t want to play the villain to business. However, it’s not nearly tame enough to gain support from Republicans.

Zoom out: You’d think that a $2.9 trillion tax proposal to fund the biggest social spending plan since the ’60s would be the No. 1 priority on Capitol Hill, but it’s not.

morningbrew.com/daily/stories/…

Lawmakers must pass a budget before Oct. 1 or else face a government shutdown, and time is also running out to raise the debt ceiling before the US defaults.