President Joe Biden unveiled his costly American Families Plan during a speech on Wednesday, signaling that various proposed tax hikes — ostensibly targeted at wealthy individuals and corporations — would be needed to pay for his proposals.
Prior to the speech, House Speaker Nancy Pelosi (D-CA) defended the call for tax increases as a justified move, blaming Republicans for increasing the national debt and deficit while they were in control of the federal government, according to the Daily Caller.
“Meeting the needs of people”
In an interview with MSNBC host Andrea Mitchell, Pelosi said the president’s decision “is exactly just to reverse some of what the Republicans did in their tax scam where they added almost $2 trillion to the national debt if you include the cost and the interest on the debt to give tax breaks to the top, top, top wealthiest people in our country.”
Accusing the GOP of having no qualms about spending “$1.9 trillion to give 83% of the benefits to the top 1%,” the speaker said former President Donald Trump’s 2017 tax cuts require a serious response by the Biden administration.
“What the president is doing is rewarding work, meeting the needs of people using some of that same money that they rewarded the rich with before,” she claimed, as the Daily Caller reported.
Pelosi went on to declare that her party does not “have any resentment against anybody for their success,” but believes “we must meet the needs of the American people,” calling the national budget “a statement of our values.”
As for the American Families Plan, its current estimated cost is at least $1.8 trillion and it comes on the heels of his proposed $2.25 trillion American Jobs Plan. Both of those proposals were introduced after Congress approved a $1.9 trillion American Rescue Plan sold as a COVID-19 relief bill.
“Not looking to punish anybody”
During his address of a joint session of Congress on Wednesday, the president discussed details of the plan as well as how he intended to pay for it, claiming he would not increase the deficit or raise taxes on Americans earning less than $400,000 per year.
Tax hikes would primarily be aimed at large corporations and the wealthiest Americans, he said, largely by way of increased rates, the elimination of certain exemptions, and stricter enforcement by the IRS.
While such rhetoric might sound appealing to ordinary Americans, personal finance group Kiplinger revealed a few ways those increased taxes could directly impact individuals, families, and small businesses.
If the proposed tax increases are approved, changes would impact the top marginal income tax rate, treat capital gains and carried interest as regular income, alter the inheritance or “death” tax, and eliminate the “like-kind” tax exemption for real estate transactions. The Tax Foundation determined that among the most onerous changes would be the changes to the death tax, arguing that inherited assets and estates would now essentially face double, if not triple, taxation for a combined total of 61%
Even though Biden declared in his speech that he is “not looking to punish anybody,” many experts seem to agree that this is precisely what his proposed tax hikes would do.