We tried to warn you.
On the heels of his $1.9 trillion coronavirus stimulus package, President Biden is planning the first major tax hike since 1993 to help pay for initiatives on infrastructure, climate and for continued assistance to America’s poor, according to a report Monday.
The boost could include an increase in the corporate tax rate and the individual rate for individuals earning over $400,000 per year, among others, Bloomberg News reported.
The outlet also reported the Biden administration sees adjusting the tax rate not only as a means to pay for projects, but also as an opportunity to control inequities in the economic system.
According to Bloomberg, proposals currently under consideration by the White House include raising the corporate tax rate to 28 percent from 21 percent, reining in tax preferences for “pass-through businesses,” raising the income tax rate on individuals earning more than $400,000, broadening the estate tax, and a higher capital gains tax rate for individuals earning at least $1 million per year.
Last month, Treasury Secretary Janet Yellen signaled that a tax increase could be in the cards later in the year as part of a legislative package.
She told CNBC that it would “involve spending and investments over a number of years” on measures like infrastructure and education. “And probably tax increases to pay for at least part of it that would probably phase in slowly over time.”
While the COVID stimulus plan relied on increasing government debt as a funding source, any additional objectives won’t, the report said.
U.S. President Joe Biden speaks on the implementation of the American Rescue Plan in the State Dining Room of the White House in Washington, D.C., U.S., on Monday, March 15, 2021. Biden is planning the first major federal tax hike since 1993 to help pay for the long-term economic program designed as a follow-up to his pandemic-relief bill, according to people familiar with the matter. Photographer: Yuri Gripas/Abaca/Bloomberg via Getty Images