82 unions and liberal groups urge Biden to go bigger on tax hikes and hold the wealthy accountable

joe biden
President Joe Biden.

  • 82 liberal groups urged Biden to go bigger on tax hikes and hold the wealthy accountable.
  • They cited Biden’s campaign proposals of reversing Trump’s tax cuts and investing in IRS enforcement.
  • Despite GOP opposition in Congress, the majority of Republican voters support tax increases.
  • See more stories on Insider’s business page.

President Joe Biden is unveiling the first part of his multitrillion-dollar infrastructure proposal today, which could include up to $3.5 trillion in tax hikes. Some unions and progressive organizations are saying he should go even bigger.

On Tuesday, 81 national organizations, led by Americans for Tax Fairness, sent a letter to Biden and Vice President Kamala Harris, commending the administration’s efforts to raise taxes on the wealthiest Americans and encouraging the president to go further. The letter said Biden’s tax plans were the “boldest of any major party presidential nominee in modern American history.”

The tax proposals have “received widespread media coverage and, perhaps more significant, your boldly progressive tax plan was heavily attacked by your political opponents, who spent untold millions of dollars and claimed falsely that the middle-class would pay more,” the letter said. “Yet, you won the most votes ever of any US presidential candidate, with a central promise of your campaign to make the rich and corporations pay their fair share of taxes. You have a clear mandate to pursue your agenda.”

The letter, which was signed by AFL-CIO and MoveOn, said that even among Republicans, raising taxes is popular. For example, a New York Times survey from November found that two-thirds of respondents, including 45% of Republican voters, supported tax increases on people making over $400,000, and an Americans for Tax Fairness survey from October found that 71% of Americans supported raising the income tax rate, including 51% of Republicans.

The best way to hold the wealthy accountable, according to the letter, is to reverse the “worst aspects” of former President Donald Trump’s Tax Cuts and Jobs Act (TCJA), including Biden’s proposals to:

  • Lift the corporate tax rate to 28% from the current 21%;
  • Restore the estate tax to its 2009 levels, meaning that still only the richest 0.59% of estates would get taxed;
  • And return the top marginal tax rate on the highest incomes to 39.6%, from the current 37%.

Aside from the TCJA proposed changes, Biden also proposed additional tax reforms during his campaign, like investing in Internal Revenue Service enforcement of high-income taxpayers and imposing a “financial-risk fee” on large Wall Street banks.

The letter said that even along with Biden’s campaign proposals, he could implement many other reforms, including a 10-percentage-point surtax on all incomes about $2 million, a financial transaction tax on bond and stock trades, and a wealth tax on ultra-millionaires.

Biden’s tax hikes have already faced opposition in Congress. While moderate Democratic Sen. Joe Manchin said an infrastructure proposal could be as large as $4 trillion using tax hikes as funding, Senate Minority Leader Mitch McConnell warned that won’t win his party’s support.

“I don’t think there’s going to be any enthusiasm on our side for a tax increase,” McConnell told reporters last week. Republicans even recently introduced a bill to repeal the estate tax, which would only affect 0.6% of farm estates.

But progressive lawmakers are continuing to push for measures that hold the ultra-rich accountable. Although Politico reported on Tuesday that Biden will not use a wealth tax to fund infrastructure, Sen. Elizabeth Warren of Massachusetts has led the effort to propose a 2% tax on households with net worths over $50 million.

“A wealth tax is critical for raising revenue, and that revenue is critical for raising opportunity,” Warren said on Twitter on March 1. “We build a future for all of our kids by investing in opportunity. This is one way we can make this government work for everyone – not just the rich and powerful.”

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Biden reportedly bumps infrastructure price tag to $4 trillion, with up to $3.5 trillion in tax hikes

Biden
President Joe Biden speaks to the press after disembarking from Airforce One after arriving in Wilmington, Delaware on March 26, 2021.

  • The new infrastructure bill could cost more, and have greater tax hikes, than originally anticipated.
  • The Washington Post reports the package could total $4 trillion, with up to $3.5 trillion in tax hikes.
  • Democrats have suggested various new tax hikes while Republicans have opposed all of them.
  • See more stories on Insider’s business page.

President Joe Biden is expected to unveil his massive infrastructure plan on Wednesday, but it could surprise to the upside.

While the plan was initially thought to have a $3 trillion price tag, it could now reportedly cost as much as $4 trillion, and could also include $3.5 trillion in tax hikes.

Last week, The New York Times first reported details of the upcoming infrastructure proposal. In that report, sources familiar with the plan said could cost up to $3 trillion, which was confirmed to Insider. According to documents obtained by the Times, the plan will be split into two separate legislative pieces: One focused on rebuilding infrastructure such as roads and bridges, and another focused on the care economy, with funding for things including universal pre-K and free community college.

But on Monday, three sources familiar with the matter told The Washington Post that the White House is expected to push for as much as $4 trillion in spending on infrastructure and for as much as $3.5 trillion in tax hikes.

The sources said that administration officials worried about the risk that the large gap between spending and revenue would widen the deficit so much could trigger a spike in interest rates, and increasing taxes would help mitigate that.

On Wednesday, Biden is expected to unveil the first legislative piece of the infrastructure plan, which would focus on rebuilding roads and bridges, expand clean energy investments, create infrastructure for electric vehicles, and more. This part of the plan would also include funding for disabled and elderly care.

As for the second part of the plan focused on the care economy, White House Press Secretary Jen Psaki said on Fox News Sunday that it will be released “in just a couple of weeks” and “will address a lot of issues that American people are struggling with.”

“The total package we’re still working out, but he’s [Biden] going to introduce some ways to pay for that, and he’s eager to hear ideas from both parties as well,” Psaki said.

Biden has already shown a historic willingness to go big with recovery packages, a contrast to the stimulus packages enacted during the Obama-era recovery during the Great Recession.

Tax hikes may be on their way – and Republicans don’t like that

As The Washington Post writes, the focus on the deficit could help appease critics who worry about spending – but it also lays out a big challenge for Biden. The White House would need to get Congress on its side to enact its reported tax increases, which “together would represent the largest tax hike in generations.”

Lawmakers have already begun floating a host of ideas to fund the infrastructure package, with tax hikes on the table. Moderate Democratic Sen. Joe Manchin of West Virginia told Axios in the beginning of March that an infrastructure bill could be as large as $4 trillion if it’s funded by tax hikes, but made it clear that he would not support using reconciliation to pass it, as the $1.9 trillion stimulus was.

Biden has been reportedly eyeing a tax increase, with wealthier Americans and corporations as the primary targets.

Biden said during his campaign that he would increase the corporate tax from 21% to 28% – still lower than its 35% rate prior to former President Donald Trump’s tax cuts. He’s also reportedly been looking at adjustments to the stepped-up basis, as well as expanding the capital gains tax. He may also raise income taxes to as high as 39% for Americans making over $400,000 a year.

But Republican lawmakers are unlikely to support tax hikes to fund infrastructure. In fact, some have been pushing for the opposite of Sanders’ proposed increase to an estate tax, instead calling for it to be repealed.

“I don’t think there’s going to be any enthusiasm on our side for a tax increase,” Senate Minority Leader Mitch McConnell told reporters last week.

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Biden is reportedly getting even more serious about taxing the wealthy

joe biden
President Joe Biden participates in a conference phone call with governors affected by a snowstorm in the Midwest and southwest Tuesday, Feb. 16, 2021, in the Oval Office of the White House.

  • Bloomberg reports that Biden is getting more serious about some taxes targeting the rich.
  • The increases come amidst growing economic disparity throughout the pandemic.
  • Capital gains, larger corporations, and high-earners could feel the impact of the hikes under talks.
  • See more stories on Insider’s business page.

President Joe Biden is getting even more serious about raising taxes on the wealthy, according to a new Bloomberg report. It likely won’t look like a “wealth tax,” though.

Biden hasn’t said he’d enact a wealth tax like the one proposed by Sen. Elizabeth Warren, and instead he’s reportedly considering alterations to the tax code that would increase taxes on high earners without creating a brand-new tax that targets wealth.

Biden has already said that Americans making over $400,000 will see a “small to significant” tax increase. High-earning Americans could see their income taxes increase to 39%.

Now, the deputy director of the National Economic Council, David Kamin has told Bloomberg what other tax changes are currently under discussion. One is eliminating the stepped-up basis, something that Treasury Secretary Janet Yellen has already been eyeing.

That measure has to do with inheritance, and how inherited assets are valued for tax purposes. Current law lets assets that have gained value since they were originally acquired be valued at their market price and only taxed on increase from the value at the time of inheritance – not any of the prior gains.

Also under consideration, according to Bloomberg, is increasing the tax rate on capital gains, taxing them at the same rate as the income tax.

Capital gains – profits made from selling assets like stocks – are taxed differently from income once the owner has had the asset for over a year. The rates for those gains are generally lower than the income tax. Throughout his presidency, Donald Trump mostly weighed even more cuts to capital-gains tax rates. Biden’s proposal could bring the rates up to 39% for those making the most money, a far cry from rates that currently come to around 20%. Also, wealthier Americans are exactly the type of people likelier to own assets that can be sold for a capital gain.

Finally, Biden wants to raise taxes on business.

Yellen is working toward creating a global minimum corporate tax rate, under the idea that if the US can convince most other countries to set the corporate tax rate at a certain level, Biden can raise corporate taxes without fear of multinationals leaving the country.

Growing disparity has underscored the push for a tax increase

According to Bloomberg, the “administration’s intentions” have been reinforced by the K-shaped recovery taking place throughout the pandemic in which high-income Americans have seen their jobs and wages grow, while low-income Americans experience the opposite. Biden himself used the term during a 2020 presidential debate.

Throughout the pandemic, low-wage and minority workers have been hit the hardest; those low-wage jobs may also not return post-pandemic, requiring workers to learn new skills and move into different fields. On the whole, workers globally have lost $3.7 trillion in wages during the pandemic, while the world’s billionaires have added $3.9 trillion to their cumulative net worths. In the US alone, billionaires added $1.3 trillion to their net worths during the pandemic.

Biden’s $1.9 trillion stimulus did offer some relief – and increased consumer confidence – for low-income Americans. That package was passed through reconciliation, which seems to be the most likely route forward for any Democratic tax hikes.

Tax increases – and what the wealthy are (or aren’t) paying – have been a hot topic

A new report found that the top 1% of Americans are avoiding taxes more than anticipated; they’ve been failing to report about 21% of their income.

There’s also been a more targeted push by progressives to introduce a new tax on wealth. Warren introduced a new bill that would increase taxes on the top 0.05% of households. If the measure had been in place in 2020, it would have raised $114 billion from billionaires alone.

White House Press Secretary Jen Psaki has said Warren and Biden share similar objectives for addressing that “those at the top are not doing their part,” but the two ultimately have different plans.

In an interview with Bloomberg, Warren praised the American Rescue Plan and Biden’s continual advocacy for it. “There is momentum now for real change, and tax policy is a critical part of that change,” she told Bloomberg.

Warren also recently Sen. Bernie Sanders and other progressive Democrats in introducing a bill that would target corporations where CEOs are at least 50 times more than the median worker. That bill could raise up to $150 billion in 10 years.

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Tucker Carlson accuses Biden of punishing the rich by raising taxes on households making over $400,000

Tucker Carlson attacks Biden's proposed tax hike on the rich and endorses ignoring the national debt.
Tucker Carlson attacks Biden’s proposed tax hike on the rich and endorses ignoring the national debt.

  • Tucker Carlson accused Biden of proposing a tax hike on wealthy Americans just to “punish” them.
  • Biden has no plans to raise taxes on families making less than $400,000.
  • Carlson falsely claimed that Biden will let very wealthy Americans and corporations off scot-free.
  • See more stories on Insider’s business page.

Far-right Fox News host Tucker Carlson accused President Joe Biden of proposing a tax hike on wealthy Americans to “punish” them and wrote off concerns about the federal debt during his Thursday night program.

Carlson argued Biden and Democrats have subscribed to an economic theory, known as Modern Monetary theory, which broadly holds the federal debt should not be an economic constraint, making taxes “beside the point.”

“Why do we have taxes in the first place, at this point? We don’t fund the government with tax revenue, we fund it with money that the federal reserve creates,” Carlson said. “Why would you even consider raising taxes on families making 400 grand? Why would you even do that? To punish you, obviously.”

The Biden administration has proposed a progressive tax increase on households that make more than $400,000, but won’t raise taxes on families making less than $400,000. The vast majority of the revenue from Biden’s tax increase will come from families who make $1 million or more. (The bottom 99% of Americans earn an average income of about $50,000.) Biden has long argued that wealthier Americans and coporations aren’t paying their “fair share” in taxes.

Fewer than 2% of American taxpayers report annual income higher than $400,000 a year, a category that likely includes Carlson, who reportedly has an annual Fox News contract worth $10 million.

This comes a few years after former President Donald Trump and Republican lawmakers passed their $1.5 trillion tax cut, which gave rich Americans and corporations a massive tax break and will be far from deficit-neutral, as its supporters once claimed.

Carlson went on to falsely accuse Biden of letting the very wealthy and corporations off scot-free. Biden is reportedly considering raising the corporate tax rate from 21% to 28%.

“No billionaire’s going to suffer. You’re going to suffer, and for no good reason,” Carlson said. “We don’t fund the government with tax revenue, we fund the government with money the Federal Reserve makes up out of nothing.”

Carlson rarely criticizes Trump, in part because many if not most of his audience are Trump supporters, but he’s previously conceded that the 2017 GOP tax cut “was far better for corporate America than it was for the middle class.”

The Fox host then brought on a guest, Victor David Hanson of the conservative Hoover Institution, who claimed Democrats would tax rich Americans to “punish people and tell their base they’re going to redistribute income.” Hanson warned that deficit spending would send the US into years of inflation, stagflation, and recession in a repeat of the 1970s. But inflation is currently at a 10-year low and Federal Reserve chairman Jerome Powell, who was appointed by Trump, said earlier this year that worrying inflation levels are “far away and unlikely.”

Powell argued this week that Biden’s $1.9 trillion stimulus package is “going to wind up accelerating the return to full employment” and urged Congress to spend even more on “investment in people’s skills and aptitudes, investment in plant and equipment, investment in software” over the long term.

Biden’s tax increase will help pay for his next set of legislative proposals, which will be focused on investing trillions of dollars in the nation’s infrastructure. Conservatives have already said they won’t support any bill that includes tax hikes on corporations and wealthy Americans.

During an ABC News interview that aired this week, Biden said he plans to pass a “small to significant tax increase” on families making over $400,000 annually. He insisted that his plan, unveiled during the presidential campaign, wouldn’t raise “one single penny in additional federal tax” on American households making less than $400,000.

“The president remains committed to his pledge from the campaign that nobody making under $400,000 a year will have their taxes increased,” White House press secretary Jen Psaki told reporters this week. “His priority and focus has always been on people paying their fair share and also focusing on corporations that may not be paying their fair share either.”

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