Tax increase: Biden confirms plan for ‘small to significant’ hike on high earners

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In this file photo, a copy of a IRS 1040 tax form is seen at an H&R Block office on the day President Donald Trump signed the Republican tax cut bill in Washington, DC on December 22, 2017 in Miami, Florida. (Photo by Joe Raedle/Getty Images)

(NEXSTAR) — America’s wealthiest households will see a tax increase in the future if President Joe Biden’s administration is able to push a plan through Congress.

In an interview airing on ABC Wednesday morning, Biden confirmed reports from earlier this week that his agenda calls for increased tax rates for corporations and high-income households.

“Anybody making more than $400,000 will see a small to a significant tax increase,” Biden told ABC News.

Biden staffers told the network that the scope of the tax increase proposal was not yet finalized, but the president insisted that people making less than the $400,000 figure “won’t see one single penny in additional federal tax.”

Bloomberg first reported Monday that the planned increases would also raise the corporate tax from 21% to 28%, expand the estate tax, trim back tax preferences on pass-through businesses such as limited-liability companies, and set up a higher capital-gains tax rate for individuals making at least $1 million.

The proposal framework appears to mirror the taxation agenda candidate Biden laid out on the campaign trail a year ago, when he promised to, “require corporations and the wealthiest Americans to finally pay their fair share.”

Polling by the New York Times, Gallup and others have reliably shown public support for increasing the tax rate on high-income Americans, but that may not do much to get the legislation passed.

The president has already conceded that he’s unlikely to win Republican support for a tax increase, and Republicans are likely to frame the plan as a potential job killer.

Biden has also reaffirmed his hesitancy to eliminate the Senate filibuster, which would make it easier to pass tax reform and other top items on his agenda by reducing or eliminating the need to win Republican support.

One path could be to use the budget reconciliation process, which requires only a majority of support. That process was used to pass the $1.9 trillion relief package earlier this month, as well as the Trump administration-backed Tax Cuts and Jobs Act of 2017, the last major alteration to the tax code.

However, there are limits on how frequently reconciliation can be used, potentially delaying movement on the proposal unless the tax increase can be packaged in a way that would win bipartisan support.

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