President Joe Biden’s campaign promise to raise taxes on corporations and the wealthy as part of the fight against income inequality in the United States has so far been met with a wall in the form of Republican members of Congress and some Democrats. However, a sudden reversal on the part of the Democratic Senator from West Virginia, Joe Manchin, brought the issue back to the agenda, giving it a renewed revival.
Biden has often said in office that companies should pay a “fair share” to the state treasury in the form of various taxes. The new bill includes $430 billion in new spending on energy, electric vehicle tax credits and investments in health insurance. Investments that will pay for themselves by raising taxes on large companies and enforcing existing tax laws, according to Manchin and Senate Majority Leader Chuck Schumer.
During a speech delivered tonight, Biden said that the deal would begin “for the first time in a long time to restore fairness to the tax code – begin to restore fairness by making America’s largest corporations pay their fair share without new taxes on individuals who earn under $400,000 a year “.
The bill would impose a minimum tax of 15% on corporations with profits of over a billion dollars, and which raised 313 billion dollars over a decade. Against the background of the fact that the US corporate tax rate dropped to 21% from 35% after a tax cut in 2017 pushed by then-President Donald Trump and his fellow Republicans, but many companies pay much less than that, and some of the largest pay no federal taxes at all. Biden proposed raising This rate was increased to 28% last year as part of the infrastructure spending bill, but the tax component was deleted from the bill.
Manchin-Schumer’s new bill also aims to close the so-called floating rate loophole, which has been a target of Democrats. Carried interest refers to a long-standing Wall Street tax break that allows many private equity and hedge fund financiers to pay the lower capital gains tax rate on much of their income, instead of the higher income tax rate paid by wage earners. According to the initiators of the law, the cancellation of the loophole will result in revenues of 14 billion dollars to the state coffers.
Schumer said today that he expects the Senate to vote on the legislation next week to “lower prescription drug prices, deal with the climate crisis urgently and vigorously, ensure that the wealthiest corporations and individuals pay their fair share of taxes, and reduce the deficit.”
Manchin-Schumer’s law is significantly smaller than the original bill that Democrats tried to pass last year. But this is still a significant achievement for President Biden, ahead of the midterm elections that will be held on November 8, and may determine whether the Democrats will retain control of Congress.
Comments to the article(0):
Your response has been received and will be published subject to the system policy.
Thanks.
for a new comment
Your response was not sent due to a communication problem, please try again.
Return to comment