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Biden To Propose Massive Tax Increases On Wealthy, Corporations

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OPINION: This article may contain commentary which reflects the author's opinion.


President Joe Biden plans to engage in some class warfare during his State of the Union Address on Thursday by calling for big tax increases on the super-wealthy and larger corporations.

According to the UK’s Daily Mail, Biden will call for raising the tax rate on corporations worth more than $1 billion from 15 percent to 21 percent, which is an increase from the 15 percent he called for earlier in his presidency.

He will also call for a separate 25 percent tax on Americans worth at least $100 million, though most often, ‘worth’ is often much more than just the amount of cash on hand.

The outlet reported further:

White House officials said the steps were part of a proposed 2025 budget to be released next week, and aimed at reducing the federal deficit by $3 trillion over 10 years. 

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The tax plans are expected to form a core part of Biden’s re-election campaign, contrasting markedly with presumptive Republican nominee Donald Trump, whose 2017 ‘Tax Cuts and Jobs Act’ slashed taxes on companies and the wealthy.

“Congressional Republicans want to cut taxes even more for the wealthy and big corporations, all while adding more than $3 trillion to the debt,” Lael Brainard, director of the White House’s National Economic Council, said, per the Daily Mail. “President Biden has made clear whose side he’s on.”

During Trump’s term, the GOP-led Congress passed the biggest tax reform in decades, lowering the corporate tax rate from 35 percent to 21 percent to make corporations more competitive globally. According to IRS data, the same tax-cut plan benefited the vast majority of American earners, not just “the wealthy,” as Democrats erroneously claimed.

The Biden plan will also raise corporate rates back up to 28 percent, clawing back half of what Trump and the GOP Congress achieved.

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“Biden also will call for Congress to approve far stricter limits on business income deductions for executive pay, limiting them to $1 million for any given employee,” the Daily Mail reported. “Current law already prohibits deductions on compensation for chief executive officers, chief financial officers and other key positions. White House officials said the new proposal would cover all employees paid more than $1 million, and raise over $250 billion in new corporate tax revenue over 10 years.”

It’s not clear if Biden will call for any spending cuts to offset the massive trillion-dollar deficits he has added to the national debt since taking office, but typically, his party opposes cuts to benefit programs no matter how insolvent they may be.

However, Biden’s plans to tax ‘the rich’ could be scrapped soon following a Supreme Court ruling that his $430 billion-plus student loan forgiveness was unconstitutional.

The central question in the case is, according to the SCOTUS Blog, “Whether the 16th Amendment authorizes Congress to tax unrealized sums without apportionment among the states.” That amendment, of course, allowed the Legislative Branch, for the first time in the country’s history, to legally impose an income tax.

“Biden later proposed a 25% annual tax on all gains to wealth over $100 million in a given year, including unrealized capital gains that aren’t currently taxable. The White House says that the tax would only apply to the top 0.01% of the highest earners. While the proposal faces long odds with a Republican-controlled House of Representatives, it could be nixed permanently if the high court rules such a tax is unconstitutional,” The Washington Examiner added.

Several groups have filed amicus briefs in the case, including the libertarian CATO Institute, which argued that under the Constitution, Biden’s action would be impermissible.

“If a tax on unrealized investment holdings like the Mandatory Repatriation Tax can be treated as an ‘income’ tax, anything can be treated as an income tax. And if anything can be treated as an income tax, then the Sixteenth Amendment’s limitation to ‘income’ taxes is meaningless,” the organization noted in its brief.

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