The proposal includes substantial measures to raise taxes on the wealthy. Taxable income over $450,000 — or $400,000 for unmarried individuals — would be taxed at 39.6 percent, President Donald J. The top rate before Trump’s 2017 tax cut brought it to 37 percent. The top capital gains rate would increase from 20 percent to 25 percent, far lower than a White House proposal to tax investment gains at 39.6 percent as income for the richest people.
Under the committee’s plan, an additional 3 percent tax would be imposed on income over $5 million. The value of estates saved from estate taxation, which doubled to $24 million for married couples under the 2017 Republican tax cut, will return to $12 million four years before the end of the year.
The proposal would also raise taxes on businesses called pass-through entities — such as many law firms and financial companies — that distribute profits to their owners, who then pay personal income tax on them. Those changes, including expanding the existing 3.8 percent additional tax to include pass-through income, would raise taxes primarily on higher earners, creating several hundred billion dollars in revenue, according to Democratic estimates.
The joint committee estimated Monday that the changes would raise about $1 trillion from high-income individuals.
Republicans stuck to the proposal. Business lobbying groups rejected the package, with the US Chamber of Commerce slamming it as “a potential threat to America’s fragile economic recovery and future prosperity”.
“President Biden, Speaker Nancy Pelosi and House Democrats are grappling with trillions of frills and tax hikes that will drive prices even higher, kill millions of American jobs and drive them overseas, and a new era of government dependency. will start. The largest expansion of the welfare state in our lifetime,” Representative Kevin Brady of Texas, the committee’s ranking Republican, said of the plan.
But what is not included is noteworthy. The richest of the wealthy earn far less than the actual salary (Mr. Bezos’ salary as Amazon founder was $81,840 in 2020), so a surcharge would have little effect on income. His vast wealth in stocks, bonds, real estate and other assets grows largely without tax every year.