President Joe Biden thinks middle-class families need relief while the wealthy and corporations need to start paying a bit more in taxes, a White House economic adviser said Tuesday.
Biden would propose increase in taxes
WASHINGTON, DC - MARCH 15: U.S. President Joe Biden delivers remarks in the State Dining Room of the White House on March 15, 2021 in Washington, DC. The administration announced on Monday that Gene Sperling, a former top economic official in the last two Democratic presidential administrations, will oversee the rollout of the $1.9 trillion coronavirus stimulus package that Biden signed into law last week.
According to a White House economic advisor, President Joe Biden argues that middle-class households deserve relief, while the rich and businesses need to start paying a little higher in taxes. Biden's tax policies would concentrate on raising taxes on companies and the rich, Bharat Ramamurti told Bloomberg.
Ramamurti served as a top economic policy advisor to Sen. Elizabeth Warren during her 2020 presidential campaign. He now serves as deputy director of the National Economic Council in the Biden administration.
Many middle-class families are suffering in the current financial environment and need assistance similar to that given in Biden's $1.9 trillion COVID-19 relief bill, as per Ramamurti. "You know, a teacher and a nurse who make $110,000 a year deserve relief," he added.
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One big concern is whether the White House would press for any relief legislation's provisions for middle-class families to be made permanent, such as the increased child tax credit. Biden is "interested in looking into that," Ramamurti said, but no decisions have been taken, Yahoo Finance reported.
Meanwhile, Republicans are making it known that, while Biden and some centrist Democrats want the next fiscal plan to be bipartisan, they are not interested in raising taxes to help pay for new infrastructure spending. Senate Minority Leader Mitch McConnell (R-KY) said Tuesday, "I don't think there's going to be much support on our side for a tax increase."
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Biden moves ahead to his promise of increasing taxes
In the United States, the payroll tax is used to fund the Social Security and Medicare systems. With a rate of 6.2 percent for Social Security and 1.45 percent for Medicare, the tax is charged half on workers and a half on businesses. There are no allowances, discounts, or credits for the Social Security payroll tax paid on annual wages and salaries of up to $142,800. President Biden has proposed a 6.2 percent tax on both employers and employees for wages and salaries exceeding $400,000.
The personal income tax, which is distinct from payroll taxes, is used to raise money for the government. It includes a variety of credits and deductions. The President proposed raising the top marginal tax rate from 37% to 39.6%, taxing dividends and capital gains as ordinary income, increasing capital gains taxes at death, and limiting deductions for high-income taxpayers.
Business income is taxed in addition to personal income. After various deductions, the corporate rate in 2018 is 21% of income. Biden proposed raising the tax rate to 28% and limiting deductions. According to The Hill, if Biden keeps his campaign promises, he will raise rates on noncorporate businesses, which employ nearly half of the country's workforce, owing to the already mentioned payroll and personal income tax hikes.
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