President Biden’s budget lays out an ambitious tax and spend agenda that Democrats are currently having a hard time passing through Congress. But what tax increases do they want specifically? The Tax Foundation recently took a look at the full picture of proposed tax increases this year. Below I’ve included the tax increases Democrats hope to enact in order to finance their priorities. Taken together, these tax increases could be devastating for the economy. Here’s the full list.
Biden’s American Jobs Plan tax increases
- Increase the federal corporate tax rate from 21 percent to 28 percent and tighten inversion regulations.
- Raise the tax on Global Intangible Low Tax Income (GILTI) to 21 percent, calculate it on a country-by-country basis, and eliminate the exemption of a 10 percent return on tangible investment abroad (QBAI).
- Impose a 15 percent minimum tax on corporate book income, which would be levied on a firm’s financial profits instead of taxable income for firms with revenue over $100 million.
- Repeal the Foreign-Derived Intangible Income (FDII) deduction, which incentivizes firms to move intellectual property (IP) into the U.S.
- Provide a tax credit for certain onshoring activity and deny expense deductions on jobs that were offshored.
- Increase corporate tax enforcement.
- Eliminate certain deductions and credits for the fossil fuel industry
Biden’s American Families Plan tax increases
- Raise the top marginal rate on individuals to 39.6 percent.
- Apply ordinary income tax rates to capital gains income of individuals with more than $1 million in taxable income.
- Tax unrealized capital gains at death with a $1 million exemption for single filers and a $2 million exemption for joint filers, with additional exemptions for certain types of assets.
- Apply the 3.8 percent net investment income tax to all income above $400,000, including active pass-through income.
- Make permanent the 2017 tax law’s 4639(I) limitation on pass-through businesses’ losses above $250,000 for single filers and $500,000 for joint filers.
- Limit 1031 Like-Kind Exchange deferral for gains above $500,000.
- Tax carried interest as ordinary income.
- Increase individual tax enforcement and enact new reporting requirements for financial institutions.
That’s over 15 different tax hikes proposed in the first 100 days of the Biden administration, with more certainly coming. Fortunately for the country, Democrats in the House can only lose four votes, and Senate Democrats have zero margin of error when pushing a tax hike bill. The clock continues to tick as moderate Democrats are getting weak knees about raising taxes as the country recovers with the 2022 midterms on the horizon. So far, Democrats have been unable to change a single provision from the 2017 Tax Cuts and Jobs Act, but their list of proposed tax hikes gets longer each day.
Palmer Schoening is President of the Family Business Coalition and part of AMAC Actions advocacy team in Washington, DC.
Stop using terms most Amac readers don’t understand like “inversion regulations “. What does that mean?
I wish I knew who the woman was who came into my place of employment and adamantly told me should would not vote for Trump because he was going to raise taxes. Makes no sense since he was the one who lowered them. There needs to be a way to combat the lies from the MSM but I have no idea what it would be other than word of mouth and a new platform rather than those censoring speech.
The “UNFAIR” tax loop holes for the wealthy and corporations have been going on since President Nixon. All loop holes need to be closed. The Wealthy and Corporations need to pay their fair share of taxes. It is Un-American not to pay your fair share of taxes, and you don’t deserve to LIVE IN THIS ALREADY GREAT U.S.A. if you don’t pay your fair share of taxes.
I would like to know those politicians in this wage or income bracket will have exemptions to this as with most programs aubmitted
These changes would be good if the revenue was used to address our looming debt crisis. We need to make this our nation’s number one priority. Otherwise our country is doomed.
I heard on the news today the G7 Nations want to ‘globalize’ corporate taxes to 15%. Wonder what Biden has to say about that. After all, he is a globalist, right?
More Government overall less business
Funny how every time a “Tax Increase On The Rich” gets allowed in, it seems to only work if the “Middle Class” actually pay for it! Time, no, well PAST time, to go to a Flat Tax on Income. You make a dollar you didn’t have before? Pay a dime in tax on it. No “shelters”, no deferments, no exceptions, everybody pays. Do this and in 3 years you will have enough money to start paying off the National Debt…
As Ronald Reagan said long ago. Businesses don’t pay taxes. They raise prices of their products and services to pay the taxes. Now, I’m not saying taxes shouldn’t be paid by business, but let’s not stiffle growth, particularly small business. I would like to see a minimum tax set up for these sleezy billionaires based on company income and their % of ownership so the Buffets, Bezos and Gates of the world can’t avoid paying income tax. Their holier then though statements are infuriating.
I have always felt that our tax laws are far to complicated, convoluted, and confusing. Too many loop holes. Too much “fanagleable” regulations. Too many special applications and special rules for certain groups. When even I, a simple retired person, has to use a CPA just to process my annual return, then it is clear……a simple flat tax is preferred. No deductions. No scales and schedules of earnings. Just a flat, unalterable rate that applies across the board….personal and corporate. Everyone pays the same rate, regardless. While this may mean hundreds of thousands of IRS workers and CPAs and lawyers and like consultants would be hard pressed for work…..perhaps even being put “out of business”, it would be a small price to pay. I know this is a fantasy, and in our present state would be near impossible to implement (because of the ingrained system that exists), but to continue to operate otherwise only perpetuates the ongoing mess. No one has the will to make the changes that matter…and it just ends up as “more of the same” no matte who is politically in charge.
Unfortunately, the Democrats probably don’t know this but you were under no military courtesy to salute another nations flag. As a fact, it is the opposite you are not supposed to salute another nations flag. I do expect that when they gave him all a little plastic soldiers and let him play G.I. Joe no one mentions this. This man is not the commander in chief he is in no way a soldier, a sailor, a marine , in-service to his country. Having been a sailor it offends me to watch him play act. But then the Democrats are rife with clowns like this, CARY, Blumenthal et al.What I wanna know is which flag is he saluting? With this clown it’s always in doubt.
This is just a start. If the Democrats are able to get these taxes passed, then they will start on people/families making under $ 400K. The biggest possible tax changes would be to go after exemptions and deductions which would be a tax increase on everyone.