Following the recent 1.9 trillion dollar governmental stimulus package, President Biden is eyeing the first major tax hike since 1993 in an effort to fund his new long-term economic plan.
The major tax hike comes in an effort to fund this new bill with something other than governmental debt which the last stimulus package heavily relied on. According to Bloomberg news, the new spending package will cost around 4 trillion dollars and will not only increase taxes on large corporations, it will also increase taxes on high earning individuals. The plan includes raising taxes on individuals who make over 400,000 dollars a year, expanding the estate tax, increasing the corporate tax rate from 21% to 28%, higher capital-gains tax rate for individuals earning at least $1 million annually, and paring back tax preferences for pass-through businesses.
Treasury Secretary Janet Yellen has said at least part of the next bill will have to be paid for, and pointed to higher rates. Which is where some of the inspiration for this bill is coming from. For Democrats, this bill is an opportunity to not only fund key agenda items like climate change and expand aid to Americans in poverty, but also to change what they call inequalities in the tax system. The bill will be a test for the Democrats to see if they can get any Republicans on board as they try to navigate around a 50-50 split Senate, with a slight majority towards the Democrats with vice president Kamala Harris breaking the tie.
Recently Senator Joe Manchin (D-VA), has pledged to block the multi-trillion dollar bill if it does not receive any support from Republicans. Manchin stated that all the government’s spending and debt could lead to “a tremendous deep recession that could lead into a depression if we’re not careful.” The nation’s debt totaled a record $3.1 trillion for just the year 2020, with the national debt piling up to more than $28 trillion overall.
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ARTICLE: KADEN BORG
POLITICS EDITOR: CARSON CHOATE
PHOTO CREDITS: BLOOMBERG