WASHINGTON – House Democrats unveiled a sweeping proposal Monday for tax hikes on big corporations and the wealthy to fund President Joe Biden's $3.5 trillion rebuilding plan, as Congress speeds ahead to shape the far-reaching package that touches almost all aspects of domestic life.
The proposed top tax rate would revert to 39.6% on individuals earning more than $400,000, or $450,000 for couples, and there would be a 3% tax on wealthier Americans with adjusted income beyond $5 million a year. For big businesses, the proposal would lift the corporate tax rate from 21% to 26.5% on incomes beyond $5 million, slightly less than the 28% the president had sought.
The tax hikes are in line with Biden's own proposals and would bring about the most substantive changes in the tax code since Republicans with then-President Donald Trump slashed taxes in 2017. Business and anti-tax groups are sure to object, but Democrats are pressing forward.
Rep. Richard Neal, D-Mass., the chairman of the tax-writing Ways & Means Committee, said the proposals would “expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.”
Senate Republican leader Mitch McConnell said the proposal is “the last thing American families need.” All GOP lawmakers are expected to vote against it. But Republicans are largely sidelined as Democrats rely on a budget process that will allow them to approve the proposals on their own, if they can muster their slight majority in Congress.