Sources close to President Joe Biden told Bloomberg over the weekend that he is looking at a major tax increase as his next legislative priority on the heels of passing a $1.9 trillion COVID relief package last week using budget reconciliation to avoid the Senate filibuster.
Biden seeks to keep campaign promises he made about raising taxes on the rich, which he defines as making more than $400,000, while giving bigger breaks to those on the low end of the income spectrum. He has promised to repeal part of former President Donald Trump’s 2017 tax cuts in order to tax the wealthy more.
He also wants to fund at least part of his recent COVID bill, which was passed even though there was no money in the budget for any of the provisions it contained.
The reported increases include raising the corporate tax from 21 percent to 28 percent; increasing the income tax rate on people making more than $400,000; expanding the estate tax; paring back tax preferences on pass-through businesses like LLCs and partnerships; and a higher capital gains tax rate for individuals making at least $1 million.
Tax plan looks to raise $2.1 trillion over 10 years
Bloomberg reported that an independent analysis of the Biden tax plan by the Tax Policy Center determined that it would raise about $2.1 trillion over 10 years.
Those numbers are based on predictions that could be flawed because they don’t take into account ways the wealthy will attempt to shield their assets from taxes.
Additionally, the Manhattan Institute pointed out in 2019 that raising taxes will not raise enough money to cover the deficit that would be created by the left’s policy plans.
Even if 100% of the wealth of Americans over $1 million was confiscated in taxes, it would not raise enough money to cover the approximately $40 trillion in spending plans by Biden and the left. And then, there would be no more capital to create more wealth so that more taxes could be collected.
Will a tax bill get through the Senate?
Eventually, Democrats are always going to run out of other people’s money, but Biden doesn’t care about that because he will be long gone by the time that happens.
Biden probably does have the power to ram a tax increase through the Senate using the same budget reconciliation process that enabled the COVID relief package to get through.
A few conservative Democrats like Sen. Joe Manchin (D-WV) may not be willing to go along with large tax increases, however, and the party can’t afford to lose a single vote because of the 50-50 Senate.
Manchin reportedly said rolling back the Trump tax cuts would be “ridiculous,” but later said that everything would be “open for discussion.”