President Joe Biden is reportedly proposing major tax hikes as part of his administration’s plan to cut the deficit.
According to Fox Business, citing a Bloomberg report, the proposal includes raising the capital gains tax rate and increasing taxes on corporations.
The plan is aimed at funding a number of programs, including infrastructure improvements, expanded healthcare coverage, and clean energy initiatives.
The administration believes that the tax hikes will generate significant revenue and help to reduce the country’s growing deficit.
One of the proposed tax increases is a hike in the capital gains tax rate. This tax is applied to the profit made from the sale of assets such as stocks, bonds, and real estate. Currently, the capital gains tax rate is lower than the tax rate for ordinary income.
Biden Expected to Propose Raising Taxes on Corporations
Biden’s proposal would increase the capital gains tax rate to the same level as the tax rate for ordinary income for those earning over $1 million per year. This would effectively double the current capital gains tax rate for these high earners.
Small Business Deals
The proposal also includes an increase in corporate tax rates.
The Trump administration lowered the corporate tax rate to 21% in 2017, but the Biden administration has proposed raising it to 28%. This increase would bring the rate closer to where it was before the 2017 tax cuts.
The revenue generated from this tax increase would be used to fund infrastructure projects such as roads, bridges, and broadband internet access.
Biden’s tax proposal has drawn criticism from Republicans who argue that higher taxes will hurt economic growth and job creation.
However, Democrats argue that the wealthy and corporations should pay their fair share of taxes to help fund important social programs.