According to a Democratic source familiar with the plans, House Democrats want to raise the corporate tax rate to 26.5 percent to fund their $ 3.5 trillion social spending plan.
A rate of 26.5 percent would be higher than the current rate of 21 percent but lower than President BidenJoe BidenNewsom Slightly Backs Off Recall Efforts In California Second Senior Official Leaves DHS In One Week Top Republicans: General Told Senators He Was MORE Against Withdrawal From Afghanistanproposed rate of 28 percent.
The House of Representatives Democrats are also aiming for an increase in the prime capital return ratio from 20 percent to 25 percent, which is significantly less than the increase proposed by Biden. And they are considering raising the highest individual income tax rate from 37 percent to 39.6 percent while adding a 3 percentage point surcharge to those with incomes over $ 5 million, the source said.
House Democrats are also proposing a number of other tax increases, including capping the deduction on non-business income, changes in inheritance tax, increased tobacco taxes and increasing a minimum tax on foreign corporations’ income, according to a document circulated on Sunday and received from The Hill.
The document makes a preliminary estimate that combined with the savings from drug price changes, the tax ideas would generate approximately $ 2.9 trillion in revenue. The document said the $ 3.5 trillion spending would be fully offset after $ 600 billion was also generated by economic growth.
The House of Representatives Committee on Ways and Means has not yet officially published the text of the law on tax increases, so the details are subject to change. The committee started considering its part of the social spending package last week and is set to continue its markup on Tuesday.
One final bill must be approved by the Democrats in both the House and Senate and the White House.
White House spokesman Andrew Bates said in a statement on Sunday that the tax ideas discussed by the Ways and Means Committee meet “two core objectives” for Biden: not to raise taxes for Americans earning less than $ 400,000, and the reversal of parts of the former President TrumpDonald TrumpNewsom Touts Victory Over Recall As Rejection of “Trumpism” Newsom Slightly Roll Back Recall Efforts In California Second Senior Official To Leave DHS In A Week MORETax cuts for the rich and corporations.
Bates added that Biden looks forward to continuing to work with the Chairman of the Ways and Means Committee Richard NealRichard Edmund NealBusiness Groups Feel Momentum in Reducing Democratic Priorities LIVE COVERAGE: Tax Hikes Are at the Heart of the Way and Means Surcharge Tester Says “100 percent” of the reconciliation package must be paid for MORE (D-Mass.) And Chairman of the Senate Finance Committee Ron WydenRonald (Ron) Lee Wyden – Moderate House Democrats are threatening a drug price bill on the House of Representatives body (D-Ore.) On the further development of his economic agenda.
This article has been updated to correct the proposed corporate tax percentage.