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Biden Banks on $3.6 Trillion Tax Hike on the Rich and Corporations

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  • Biden Banks on $3.6 Trillion Tax Hike on the Rich and Corporations

WASHINGTON — President Biden on Friday unveiled $3.6 trillion in tax increases on wealthy Americans and big corporations to pay for his plans to combat climate change, reduce income inequality and significantly expand the nation’s social safety net.

For the wealthiest taxpayers, the proposals would mean higher taxes on their income, the sale of their investments and the transfer of their assets when they die. Starting at the end of 2021, the top individual income tax rate would rise to 39.6 percent from 37 percent, reversing the Trump administration’s tax cuts for the highest income taxpayers. The new rate would apply to income over $509,300 for married couples filing jointly and $452,700 unmarried individuals.

Taxes on capital gains — the proceeds of selling an asset like a stock or a boat — for people earning more than $1 million would be taxed as ordinary income, effectively increasing the rate wealthy individuals pay on that money to 39.6 percent from 20 percent.

Because capital gains income would also still be subject to a 3.8 percent surtax that helps fund the Affordable Care Act, the conservative Tax Foundation estimated that high-earning taxpayers in some states could face tax rates on their capital gains that are above 50 percent, the highest such tax burden in a century.