Corporate Taxes
Democrats Want The Corporate Tax Rate Up From 21% To 26.5%
House Democrats are planning to propose raising the corporate tax rate from 21% to 26.5%. This is in line with efforts to raise funding sources for President Joe Biden’s major social spending programs.
RELATED: Senate Democrats Want Taxes on Stock Buybacks and CEO Pay
Democrats Want to Raise the Corporate Tax Rate
Democrats on the House Ways and Means Committee are still searching for new tax revenues to pay for Biden’s $3.5 trillion programs. One proposal is to increase the corporate tax rate from 21% to 26.5%. While this is a substantial rise, it’s also lower than the 28% rate that Biden wanted.
Meanwhile, the highest rate for capital gains will increase from 20% to 25% instead of the original proposal to cap it all the way to 39.6%.
For Americans with adjusted gross income exceeding $5 million, Democrats are proposing a 3% surcharge. In addition, the Democrats are also looking at new taxes for cryptocurrency and additional taxes for tobacco products.
Tax Proposals Will Raise $2.9 Trillion
Sources point to a document circulating among members of Congress that cites preliminary estimates. It said that the new tax proposals would raise $2.9 trillion in revenue.
The total includes $700 billion in revenue and cost savings from Medicare drug prices. In addition, the proposal also adds in $600 billion from the estimated economic growth effects of the spending increase.
Plus, the House Democrats’ proposal also expects to raise an estimated $16 billion by limiting deductions for executive compensation.
It also includes a projected rise of $96 billion in higher taxes on tobacco, nicotine, and e-cigarette products. Finally, new taxes for cryptocurrency based on general tax rules will generate $16 billion.
Higher Tax Rates Compared To Trump Administration
The new tax plan will also reduce the $24,000 estate and gift tax exemption for married couples by the end of 2021. This is four years earlier than the scheduled cuts passed under former President Donald Trump. Incidentally, Congress under the Trump administration passed the reduction of the corporate tax rate from 35% to 21%.
The House Ways and Means proposal emphasized that it meets two goals laid out by President Biden. First, it doesn’t raise taxes on Americans earning under $400,000.
Second, it rolls back some of Trump’s tax incentives for corporations and the wealthy. However, the House proposal does not mention anything about lifting the $10,000 cap on the state and local tax deduction.
Getting Tax Proposals Passed in the House
The proposal remains a draft and is still subject to horse-trading. Democrats shouldn’t expect an easy passage, considering their razor-thin majority in both Houses. Even within the party, the proposal remains on shaky ground from moderates.
Any Democrat proposal will only need three Democrat defections in the House and zero in the Senate to lose. Only through a budget reconciliation process can the Democrats get passage and bypass Republicans.
Earlier Sunday, West Virginia Senator Joe Manchin, a moderate Democrat with a crucial Senate vote, remained opposed to the $3.5 trillion plan. He said the price tag is too much.
In addition, he doesn’t want to tinker with the corporate tax rate. Instead, Manchin proposed a lower program worth $1.5 trillion.
Reducing The Proposal
As early as now, some Senate Democrats are bracing for reductions in the Biden proposals. They prefer raising revenue toward businesses rather than individuals.
Last Friday, Senate Finance Committee Chairman Ron Wyden (D-OR) introduced two new proposals. The first is an overhaul of tax treatment for business partnerships.
The second is a 2% excise tax on stock buybacks. The latter was co-sponsored by Senate Banking Committee Chairman Sherrod Brown (D-OH).
Watch the Bloomberg Politics video reporting that House Democrats are set to propose a corporate tax rate to 26.5%:
Loading ...Do you agree with the proposals for increasing the corporate tax rate to pay for social spending programs? In addition, how do you feel about raising taxes in general?
Let us know what you think. Share your opinions on the matter below.
12 Comments
Hey, we have to get more money for the millions of illegal welfare leeches invading this country somehow!
It’s a vicious and never ending cycle! Where do these politicians come from? Their philosophy of governing is wrong and only drives up the cost of living for everyone in the US (except for the politicians themselves, as they only get richer). These so called experts have our economy in shambles, increased our National debt and put our people in danger. Their social programs are mismanaged- the poor need a hand up, not a hand out! Our welfare program has managed to create “Welfare Generations” that have decided to not try to work and have the rest of the population pay for them!! They need to bring back the old CCC where you have to work at a at a CCC project in order to be paid welfare or they have to learn a trade to be productive. NO FREE RIDES!! These people need to get their self-respect back! They need a hand up, not a hand out!!
That “Corporate” tax rate will become 29.5%, if not higher under Democrats tyrannical rule!
it would be foolish. the corporations will simply pass on the additional cost to the consumer. this is the type of government we get when the people vote for democrats. i don’t blame the politicians, because the didn’t hide the fact that they would raise taxes. they told us what they would do and the dumb electorate voted for them anyway. you got the government you deserved. To all of you that complain about higher prices. your vote put this in motion.
Its Amazing we are n debt more from Corporations and filthy rich from Trickle down economics, than we are from anything else.
The amount of of 26.5 is still lower than the the corporate tax rate, was before trump…so it still better than before… 21% puts the USA to deep in debt. without a guarentee return on our investment in corporations, chevy is moving 60% of their manufacturing to china; after getting tax breaks to help build the economy and the only economy that raised was filthy rich people, no middle class, not working poor.
its time for corporations to pay their fair share, especually if they are not adding American jobs,,, when you do add jobs that should be their only tax break…
Why have we not selling pot it has more benefit all the way around the selling of it is a great deal in stead of taxes u already get gas alcohol food and cigarettes dumb so why not ask Denver Co. We need that instead of taxes Alot of states are dining it be smart and do it some ones buys all day everyday the only thing l have seen pot makes hungry and lay down a hell of away to be now look at the loveones alcohol has taken a way do the math and do the right thing for a change save lives
It is amazing how little people understand about economics. Raising taxes on corporations will only drive the costs of goods up. The reason we are debt is because of all of the social programs our gubment starts and never stops.
How about they donate their salaries to fund their cockamamie ideas and leave the rest of us alone. After all everything they are proposing is full of pork for their pet projects, certainly NOT to help us
As prices rise all around us for nessary essential’s to live, we all stand still watching and waiting for the crash ahead. Like a dear in the headlighs.This administration is taking us down a deep and dark path! Buckle up folks…email, call, or write your congressman or woman and let them know that 2022 and 2024 there jobs will be terminated! All this in less than a year! Who would of thought. Elections has consequences!!!
The political views with our present administration is latterly out of there minds. If these idiots would really do there jobs, and keep in mind of what is good for the people, instead of political points of view of a incompetent president, that has gotten everything wrong, and is a puppet of the left, that can’t even read a teleprompters, is assigned. It is obvious dementia is setting in with this old man, is not listening to his advisers, and acting like a king, is not fit to be President.
I totally agree with Ned’s comments. I’m also tired of these politicians taking the easy way out (raising taxes) to fund dozens of duplicate programs that need to be shut down. They should be digging into these duplicate programs to see the “why” they were started. Then there’s adding programs and/or bolstering “welfare” programs without any “payback” from the recipients. Hasn’t any of you noticed that a lot of them have name brand clothes, Nike sneakers, the latest cell phone? While lower class people who really need the help can’t get it. I know a family with 2 kids who needed temporary help but their combined income from unemployment came to $11 over the limit so they got nothing. Took them almost a year to get back on their feet by themselves. Meanwhile, others walk out of stores with arms full of goodies from stores because of the way the Dems have pushed cutting the police and criminal law, changing bail laws if any, and murderers and predators walk free, probably living off the system. Clinton had the work for welfare rule. Not a word against it. Trump tried the same thing. What a crime it was according to the Dems. Everything is politics. Watch how it gets closer to 2022. Politicians will promise the moon to get or keep their position in government because it’s a gravy train for them.
I feel like ever since Biden took office everything has went to shit and i never voted for Biden and i don’t think he knows what he is doing we want Donald trump back he was stopping the drugs and illegal immigrants in the US and now that Biden has took office the world has gone to s*** and now the US is suffering for it to bring back Trump so he can fix this BS that Biden is putting us through and i also think anyone and everyone who is on s.s.i and s.s.d.i and food stamps should have to pass random drug screens and no one is doing anything about those who are on drugs including the president