Republica Press

Your Business & Political News

REPUBLICA PRESS
Your Business & Political News

Biden Will Seek Tax Increase on Rich to Fund Child Care and Education

by

WASHINGTON — The next phase of President Biden’s $4 trillion push to overhaul the American economy will seek to raise taxes on millionaire investors to fund education and other spending plans, but it will not take steps to expand health coverage or reduce prescription drug prices, according to people familiar with the proposal.

Administration officials had planned to include a health care expansion of up to $700 billion, offset by efforts to reduce government spending on prescription drugs. But they have decided to instead pursue health care as a separate initiative, a move that sidesteps a fight among liberals on Capitol Hill but that risks upsetting some progressive groups that have pushed Mr. Biden to prioritize health issues.

The president is set to outline his so-called American Family Plan, which includes measures aimed at helping Americans gain skills throughout life and have more flexibility in the work force, before his first address to a joint session of Congress next week. Its details remain a work in progress and could change in the days before the announcement.

But after weeks of work, administration officials have closed in on the final version of what will be the second half of Mr. Biden’s sweeping economic agenda, which also includes the $2.3 trillion American Jobs Plan the president described last month. That plan focused largely on physical infrastructure spending, like repairing bridges and water pipes and building electric vehicle charging stations, and was funded by tax increases on corporations.

expanded tax credit for parents — which is essentially a monthly payment from the government for most families — that was created on a temporary basis by the $1.9 trillion economic aid package Mr. Biden signed into law last month. The duration of that extension was earlier reported by The Washington Post.

Democrats on Capitol Hill have urged Mr. Biden to instead make permanent that credit, which analysts say will drastically cut child poverty this year. Those pushing Mr. Biden include Senators Michael Bennet of Colorado, Cory Booker of New Jersey and Sherrod Brown of Ohio, along with Representatives Rosa DeLauro of Connecticut, Suzan DelBene of Washington and Ritchie Torres of New York.

“Expansion of the child tax credit is the most significant policy to come out of Washington in generations, and Congress has an historic opportunity to provide a lifeline to the middle class and to cut child poverty in half on a permanent basis,” the lawmakers said this week in a joint statement. “No recovery will be complete unless our tax code provides a sustained pathway to economic prosperity for working families and children.”

The family plan will also include some type of extension for an expanded Earned Income Tax Credit, which was included in the earlier aid package on a one-year basis.

The plan’s spending and tax credits will total around $1.5 trillion, according to administration estimates, in keeping with early versions of the two-step agenda first reported last month by The New York Times.

To offset that cost, Mr. Biden will propose several tax increases he included in his campaign’s “Build Back Better” agenda. That starts with raising the top marginal income tax rate to 39.6 percent from 37 percent, the level it was cut to by President Donald J. Trump’s tax overhaul in 2017. Mr. Biden would also raise taxes on capital gains — the proceeds of selling an asset like a stock or a boat — for people earning more than $1 million, effectively increasing the rate they pay on that income to 39.6 percent from 20 percent.

The president will also propose eliminating a provision of the tax code that reduces taxes for wealthy heirs who sell assets they inherit, like art or property, that have gained value over time. And he would raise revenue by increasing enforcement at the Internal Revenue Service to bring in more money from wealthy Americans who evade taxes.

Administration officials were debating other possible tax increases that could be included in the plan this week, like capping deductions for wealthy taxpayers or increasing the estate tax on wealthy heirs.

All of the tax provisions would keep with Mr. Biden’s campaign promise not to raise taxes on individuals or households earning less than $400,000 a year.

Previous versions of the family plan, circulated inside the White House, also called for raising revenues by enacting measures to reduce the cost of prescription drugs bought using government health care programs. That money would have funded a continued expansion of health coverage subsidies for insurance bought through the Affordable Care Act, which were also temporarily expanded by the economic aid bill earlier this year. Speaker Nancy Pelosi of California had pushed for that continued expansion.

Mr. Biden’s team was under pressure from Senator Bernie Sanders, independent of Vermont and the chairman of the Budget Committee, to instead focus his health care efforts on a plan to expand Medicare. Mr. Sanders has pushed the administration to lower Medicare’s eligibility age and expand it to cover vision, dental and hearing services.

View

Terms and Conditions - Privacy Policy