Democrats on a House committee proposed Monday a tax hike for the wealthy and for companies earning more than $5 million a year.
Democrats hope that tax hike would raise $2.9 trillion over 10 years to pay for President Joe Biden’s $3.5 trillion social spending program that their party wants to pass in Congress before the end of the month.
That plan has yet to be drafted and several congressional committees are now looking at what exactly to include in that plan.
In that context, the Democrat, Richard Neal, chairman of the House Ways and Means Committee of the Lower House, revealed Monday a proposal that would serve to abolish part of the tax reform passed in 2017 by Republicans in Congress under Donald Trump’s administration with the purpose of encouraging investment and economic growth.
Specifically, Neal wants to replace the flat rate of 21% that all companies pay in taxes with a graduated structure, so that companies earning less than $400,000 a year would pay 18% in taxes, those with profits of up to $5 million would pay 21% and those above $5 million would pay 26.5%.
That proposal, however, is far from the flat rate of 28 % proposed by President Joe Biden, and is still lower than the 35 % that was in place before Trump’s tax reform.
Likewise, Neal’s plan would raise from 37 % to 39.6 % the amount of taxes paid by those individuals earning more than $400,000 a year, or $450,000 in the case of married couples.
Those figures are also lower than Biden’s proposal to set the tax cap at $452,700 a year for individual tax filers and $509,300 for married couples.
Neal’s plan has not yet received the support of all the Democrats, whose more moderate wing resists raising taxes for companies or higher incomes because of the serious consequences this would have for investments and the country’s economy.