Get ready, America. President Joe Biden’s tax increases are on the way. The White House is looking to increases taxes for companies and the wealthy to fund infrastructure, among other things.
Here are five things Black people should know.
According to Biden administration officials, the targets of the tax increases will likely be business owners, investors, and wealthy Americans. The tax money will be used to fund the president’s multitrillion-dollar infrastructure and jobs package, The Washington Post reported.
The main part of the tax increases will probably be a higher corporate tax rate — reversing part of former President Donald Trump’s steep corporate tax cut in 2017 — as well as higher levies on investment income and a higher top marginal tax rate.
It’s not like the tax hikes were a surprise. They are part of Biden’s much-touted “Build Back Better” agenda, which includes a range of initiatives, from jobs to massive infrastructure improvements.
Biden’s legislation is broken up into two parts — one focused on infrastructure and clean energy, and a second focused on domestic priorities such as child care and prekindergarten.
The president has promised that his tax increases will not affect people earning less than $400,000 per year. The median income of Black families in 2019 was $45,438.
The legislation includes increasing the highest income tax rate from 37 percent to 39.6 percent; significantly increasing taxes on wealthy investors and limiting deductions that rich taxpayers can claim annually, among other things, The Washington Post reported.
Opposition to the tax plan is expected from congressional Republicans and members of the president’s party. Republicans have said that the tax plan will hurt businesses.
“There’s no good case for anything like the kind of tax increases they’re advocating,” said Sen. Patrick J. Toomey (Pa.), who helped craft the 2017 GOP tax legislation. “The idea we should agree to some huge economy-crushing tax increase so the government can go on yet another spending binge is a nonstarter for me.”
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Because of the expected pushback, most observers say Biden’s tax plan will have to be watered down. Goldman Sachs “is penciling in a smaller hike that lifts the corporate tax rate to 25 percent. That more modest tax hike would create only a 3 percent drag on earnings,” CNN reported.
