During the tumultuous and tawdry 2020 presidential election, there are a great many warnings being issued by folks on both sides of the contest about just how bad things could get if their opponent were to wind up in the White House.
This is politics in a nutshell, really, and none of that is all that surprising.
What is a bit of a shocker, however, is just how right Donald Trump was when he consistently predicted that Joe Biden was going to overhaul our national tax system.
President Joe 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.
Unlike the $1.9 trillion Covid-19 stimulus act, the next initiative, which is expected to be even bigger, won’t rely just on government debt as a funding source. While it’s been increasingly clear that tax hikes will be a component — Treasury Secretary Janet Yellen has said at least part of the next bill will have to be paid for, and pointed to higher rates — key advisers are now making preparations for a package of measures that could include an increase in both the corporate tax rate and the individual rate for high earners.
With each tax break and credit having its own lobbying constituency to back it, tinkering with rates is fraught with political risk. That helps explain why the tax hikes in Bill Clinton’s signature 1993 overhaul stand out from the modest modifications done since.
The proposals were generally skewed toward income inequality:
Raising the corporate tax rate to 28% from 21%Paring back tax preferences for so-called pass-through businesses, such as limited-liability companies or partnershipsRaising the income tax rate on individuals earning more than $400,000Expanding the estate tax’s reachA higher capital-gains tax rate for individuals earning at least $1 million annually. (Biden on the campaign trail proposed applying income-tax rates, which would be higher)
The administration appears to be vehemently opposed to characterizing the tax plan as a “wealth tax”, but this is likely due to the stigma of that phrase during the 2020 campaign.
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