MNI: Biden Proposes USD1.8T Family Plan, USD1.5T Tax Hikes

U.S. President Joe Biden Wednesday is proposing USD1.8 trillion in social investments and tax credits over a decade, with tax hikes aimed at the wealthy intended to raise USD1.5 trillion over ten years, with social spending plans, when paired with earlier corporate tax reform proposals, fully paid for over 15 years and will reduce deficits over the long term, senior administration officials said Wednesday.

Biden's American Families Plan would invest just over USD1 trillion on education (USD511 billion), child care (USD225 billion), paid leave (USD225 billion), and nutrition assistance (USD45 billion) in a bid to reshape the social infrastructure of the US economy. The proposal also includes USD800 billion in tax cuts, extending healthcare premium tax credits and Biden's child tax credit increases through 2025, officials said on a briefing call to journalists.

And to pay for the investments Biden is seeking to Increase the top income tax rate to 39.6% from 37%, raise capital gains and dividends tax rates to 39.6%, ending so-called stepped-up basis for gains over USD1 million (USD2.5 million per couple), and boost IRS audits of high-earners, which the White House says will raise USD700 billion over 10 years.

JOBS PLAN

This most recent proposal, together with Biden's USD2.25 trillion American Jobs Plan, would total over USD4 trillion, the most ambitious government overhaul of the economy in decades. But the administration's proposal also shows the limits constraining Biden's ambitions, with the White House set balancing campaign pledges and demands from progressive and moderate allies in the face of countervailing pressures on Capitol Hill.

Last week Senate Republicans floated a USD568 billion five-year infrastructure plan but the proposal was met coolly by Democrats, and Republican leaders panned Biden's Families Plan proposal Tuesday before it was released.

Senate Majority Leader Chuck Schumer Tuesday said Democrats "want to get as big and bold action as we can get," but with close margins in the House and Senate some, including Senator Chris Coons (D-DE), have suggested that Democrats should look for areas of agreement with Republicans and attempt to break up the legislation to pass some parts with bipartisan support.

Senator Coons, who is close with Biden, has suggested passing other elements through budget reconciliation, which requires 51 votes rather than the 60 votes.

Biden will be highlighting the plan in a joint address to Congress Wednesday night at 9:00pm EST, before hitting the road for a sales pitch in Georgia and Pennsylvania later this week.

Source: White House