By HOPE YEN and LISA MASCARO
WASHINGTON – House Democrats on Monday unveiled a sweeping tax hike proposal for the big business and the rich to fund President Joe Biden’s $ 3.5 trillion rebuilding plan while Congress pushes the far-reaching package that spans almost all aspects of the domestic life concerns.
The proposed maximum tax rate would reset to 39.6% for couples with incomes greater than $ 400,000, and a 3% tax would be levied on wealthier Americans who earn more than $ 5 million a year. For large companies, the proposal would raise the corporate tax rate from 21% to 26.5% for incomes over $ 5 million.
Overall, the tax increases are in line with Biden’s own proposals and would bring about the most substantial changes to the tax code since the Republicans cut taxes with then-President Donald Trump in 2017. But the Democrats are pushing forward.
Rep. Richard Neal, D-Mass., Chairman of the Ways & Means Committee on Taxation, said taken together, the proposals would “expand opportunities for the American people and aid our efforts to build a healthier, more prosperous future.”
It’s a disheartening moment for Biden and his allies in Congress as they put together the massive package that is destined to become one of the largest single actions, if any, contemplated in the future. The president’s “deconstruction” agenda includes spending on childcare, health care, education and strategies to combat climate change. It’s a huge endeavor, in part with the Great Society or the New Deal.
A Democratic senator, vital to the bill’s fate, says the cost must be cut to $ 1 trillion to $ 1.5 trillion in order to win his support.
Senator Joe Manchin, DW.Va., also warned that Congress “no way” is spending the end of September on House Speaker Nancy Pelosi, D-Calif and how to pay for it.
“I can’t support $ 3.5 trillion,” Manchin said on Sunday, specifically referring to his opposition to a proposed increase in the corporate tax rate from 21% to 28% and huge new social spending. “We should look at everything, and we don’t. We don’t have to rush this and do it within a week because we have a deadline or someone will fall through the cracks. “
Democrats have no votes to spare if they want to implement Biden’s massive “Build Back Better” agenda, with the Senate split 50:50 and Vice President Kamala Harris the tiebreaker when there is no Republican support. The leaders of the Democrats in Congress have set themselves the goal for Wednesday of having the bill drafted in the committees.
Repeatedly pushed for a price he could support, Manchin said, “It will be $ 1.5 trillion.” He suggested that the range be based on a modest increase in the corporate tax rate to 25%, a number he believes will keep the US globally competitive.
“The numbers you want to pay for and the tax changes you want to make, are that competitive?” asked Manchin. “I think some changes have been made that are not keeping us competitive.”
But Senator Bernie Sanders, the independent Vermonter who heads the Senate Budgets Committee and helps draft the measure, noted that he and other members of the Liberal flank in Congress originally called for an even tougher $ 6 trillion package.
“I don’t think it’s acceptable to the president, the American people, or the overwhelming majority of the people in the Democratic Group,” Sanders said. He added, “I believe we will all sit down and work together and come up with a $ 3.5 trillion reconciliation bill that addresses the hugely unmet needs of working families.”
The current draft provides billions for rebuilding infrastructure, combating climate change, and expanding or introducing a range of services, from free pre-kindergarten to dental, vision and hearing aid care for the elderly.
Manchin voted last month to approve a budget resolution setting the number, although he and Senator Kyrsten Sinema, D-Ariz., Have expressed reservations about the total. All of this would be paid for with taxes on corporations and the rich.
Congressional committees have been working hard on parts of the 10-year proposal this month to keep Pelosi and Senate Majority Leader Chuck Schumer, DN.Y., on schedule for drafting the bill. Pelosi is aiming for a House vote by October 1, near the September 27 schedule, to vote on a leaner infrastructure plan favored by moderate lawmakers.
Manchin, who commented earlier this month urged a “strategic pause” in legislation to reconsider costs, described the timing as unrealistic. He called on Congress to respond first to the $ 1 trillion bipartisan infrastructure bill passed by the Senate. But Liberal Democrats have threatened to withhold support until the $ 3.5 trillion spending bill is passed in parallel.
Some spoke on CNN’s State of the Union, NBC’s Meet the Press, and ABC’s This Week. Sanders was on CNN and ABC.
The Associated Press Writer Marcy Gordon contributed to this report.