Biden Wants Corporate Tax Hike, Help for Families Making $110K, Aide Says
(Bloomberg) -- President Joe Biden’s tax plan will feature higher levies on corporations and wealthy Americans, with relief eyed for middle-class households, including those in the $110,000-a-year income range, a White House economic aide said Tuesday.
“The key here is that the president believes strongly that the biggest corporations and those folks who have done extremely well over the last several decades should pay a bit more,” Bharat Ramamurti, deputy director of the National Economic Council, said Tuesday in an interview with Bloomberg Television.
One aim of Biden’s coming tax program will be to encourage large businesses and multinational corporations to boost their investments in the U.S., Ramamurti said. Wealthy individuals who have profited even during the Covid-19 crisis will be targeted for higher levies, he said.
“We hope to work with Congress to accomplish those goals,” Ramamurti said, without offering a timeline for any announcements. “The president’s tax plan is intended to make sure that middle-class families are not paying more than their fair share and that the wealthiest folks, who by and large have done quite well over the last several years, including during the last year, are paying a little bit more.”
Top Republicans are already warning that Democrats will need to go it alone on any infrastructure-led program that is paid for in part with higher taxes. Senate Minority Leader Mitch McConnell said Tuesday there wouldn’t be bipartisan support for such a move.
Biden is expected to lay out his longer-term proposal, dubbed “Build Back Better,” to a joint session of Congress in the spring.
Ramamurti indicated that, along with help for lower-income households, middle-class ones would also benefit under the Biden plan.
Asked how middle class might be defined, Ramamurti said, “A teacher and a nurse who collectively make, you know, $110,000, deserve relief. And what we’ve seen in the data is that families with that kind of profile have suffered.”
Parents with kids have been given relief with expanded child-tax credits in the $1.9 trillion pandemic-relief bill signed last week, Ramamurti said. But despite calls by Democratic lawmakers including House Appropriations Chair Rosa DeLauro to make that measure permanent, White House aides Tuesday refrained from making such a commitment.
“I think time will tell whether or not this policy is made permanent,” Heather Boushey, a member of the Council of Economic Advisers, said on MSNBC.
Ramamurti said that Biden has said “he’s interested at looking at that. Obviously we’re not quite” at that point yet.
Republicans have blasted the Biden administration’s tax plan, which Bloomberg News reported Monday would amount to the first major hike in rates since the Clinton administration in 1993.
“The Biden-Harris administration is fulfilling its campaign promise to ram through job-killing tax hikes,” Rick Scott, the Florida senator who chairs the Senate GOP’s campaign arm, said in a statement Tuesday. “As folks across the nation recover from this economic crisis, the last thing they need is to send their hard-earned money to fund the Democrats’ big government agenda.”
The Chamber of Commerce on Tuesday also highlighted its continuing opposition to raising the corporate tax rate, saying it would “make the United States a less attractive place to invest profits and locate corporate headquarters.”
Rather than raising taxes, McConnell and other Republicans have once again proposed eliminating the 40% tax on estates exceeding $11.7 million and couples double that amount.
Senator John Thune, the No. 2 Senate Republican, said Tuesday that Republicans doubled the estate tax exemption in 2017 but that is slated to expire in the middle of the decade. “Doubling the exemption is not enough,” he added, warning of the impact on ranchers.
McConnell predicted Tuesday that Democrats would pursue a budget-reconciliation bill -- which only needs a simple majority to pass -- for Biden’s next economic program. It would be a “Trojan horse” that’s labeled as an infrastructure bill, but jammed with liberal priorities including assorted tax increases, he said.
Boushey highlighted that the U.S. economy did well in the aftermath of the last tax hikes. Then-President Bill Clinton’s economic program in 1993 included higher income-tax rates and the last increase in the national gasoline tax, and came at a time when unemployment remained elevated after the 1990-91 recession.
There are arguments that tax increases “are necessarily going to thwart growth, but that’s not what we saw in the 1990s,” Boushey said. “The second half of the 1990s were years that were actually quite good for working Americans. It was a period where we actually saw inequality close and wages rise across the bottom half of the wage distribution.”
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