As the country begins to recover from the economic effects of the coronavirus pandemic, the Biden administration is gearing up to tax wealthy American households in order to finance the second phase of his infrastructure plans that are set to be a multi-trillion dollar project.
The new plan will tax any household/person that makes over $400,000 per year. While it is still unclear at the moment if this plan will tax total household incomes, or individual earnings, Jen Psaki said in March that Biden’s proposed $400,000 threshold for tax increases applies to families, rather than individuals, meaning the hike could hit individuals who earn $200,000 a year if they are married to someone who makes the same amount. However, she didn’t specify a threshold for individual earners [Fox Business].
This comes at a time when tensions are high between Republicans and Democrats, making it difficult for any bipartisanship. The Republican party has already made it clear that they will not be supporting any type of law that will hike up the taxes on corporations, or the high income families, but the Democratic party feels that it is their duty to tax the wealthy in order to give money to fund their other bills, and welfare agencies. Rep. Kevin Brady (R-TX) who is one of the top Republicans on the Ways and Means Committee for tax writing has come out with a statement saying that they think that the voters will find this move to be “detrimental” to the economy.
Democratic lawmakers from high-cost places such as New York City and San Francisco, however, are likely to argue that their constituents who earn $400,000 don’t count as rich. Republicans are already arguing that raising levies will destroy jobs and hurt the economy as it begins to recover. The Biden administration is still trying to work out how to get the money for the rest of the tax plan, and are even considering raising taxes to the 39.7 percent on income they were before the Trump administrations 2017 tax cut [Politico].
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