Four years ago, at the beginning of his term, former President Donald Trump started by cutting taxes on the rich. Well, the new tenant of the White House, Joe Biden, after having succeeded in vaccinating over 200 million Americans decided to do exactly the opposite.
In fact, Biden planned to present to Congress an expansion of the “monster” infrastructure plan centered on social programs, such as the expansion of child protection and the improvement of public education provision. And to finance it he imagined, among other things, to raise taxes to the highest incomes.
The initial project aimed at the modernization of the country and the creation of millions of new jobs and the extension on the social will be supported from an investment of approximately 4 trillion dollars.
According to reports from the New York Times, the social plan is also supported by the increase in the tax rate on the highest incomes, from 400,000 dollars per year, as well as the tax on capital income.
Wealthier Americans could thus see their income taxes increase from today’s 37% to 39.6%.
And capital gains that are now taxed differently from income, and often at a lower rate, up to 20%, would also be affected. Here, too, there would be a tax rate of 39.6% but for incomes above a million dollars a year.
The more progressive faction of the Democrats has long demanded some sort of wealth tax, with initiatives being promoted in states like New York to tax millionaires. The goal is twofold: to remove the deficit from the public coffers and also to raise extra funds for the recovery.
Another aspect that will be changed in the current tax system will be inheritance tax. It is now taxed only at the time of inheritance, and does not provide for the subsequent revaluation of the assets received.
Biden, before passing through Congress, wants to present the so-called American Family Plan, without, however, simultaneously addressing the expansion of the national health plan.
Enlargement of the health plan, an increase in taxes for the rich and the proposal to reduce the purchase of weapons in one go would be three bitter morsels for the Republicans to digest and for this Biden tends to dilute these “democratic” measures.
The social program, or “human infrastructure” plan, plans to maintain the extension of the deduction for children adopted in the rescue plan until 2025, with cash payments to parents, even to those whose incomes are exempt from taxation. The stated goal is to reduce child poverty, a plague that the pandemic has further aggravated. Biden wants to raise millions of Americans by reducing the poverty that now affects one in six children by 50%.
The combined infrastructure proposal has been split into two (physical and social infrastructure), as Biden believes it will be easier to push the proposals separately. The main objections to what Republicans consider wasteful will come not only from opposition to Congress, but also from “friendly fire”. “The moderate Democrats in fact have proposed a 25% lower corporation tax increase, a percentage that would facilitate the passage of approval. But the battle has just begun.