Correspondent in New York
House Democrats have detailed their proposals for significant tax increases as part of its efforts to pay for ambitious social spending and infrastructure plans. The increases, which mostly affect high incomes and companies, represent a dismantling of the former president’s fiscal policy Donald Trump, which lowered taxes across the board, but with a special impact on those taxpayers.
The plans were presented by the Democrats who make up the Budget Control committee of the lower house and will serve to pay the expense of 3.5 trillion dollars in a decade promoted by the US president, Joe Biden, and his allies in Congress. The tax increase, however, is somewhat more modest than Biden wanted, hoping to please more moderate Democrats in the face of the party’s slim majorities in the House of Representatives and the Senate.
For starters, the tax ceiling for individuals will go from 37% to 39.6% starting next year. The increase will affect only incomes of more than $ 400,000 a year, or $ 450,000 for marriages.
Additionally, there will be a 3% increase in taxation for those -whether individuals or couples- with an income above five million dollars.
The maximum rate for capital gains will go from 20% to 25%. With changes to the previous tax derived from ‘Obamacare’ – the public health care program promoted by Barack Obama-, for capital investments, which was 3.8%, the rate will be raised to 28.3% for those capital gains.
The proposal also includes the disappearance of many deductions from which high income and companies could benefit. They will also see corporate tax grow from 21% to which Trump lowered it to 26.5%, somewhat below the 28% that Biden wanted, but above the 25% demanded by some moderate Senate Democrats.
The plan will also increase the tax on companies’ foreign earnings, from 10.5% to 16.6%. Again, down from the 21% proposed by the Biden Administration.
The proposals will be fought by force by the ‘lobby’ and by the Republicans, who applauded Trump’s tax reform as one of the keys to economic take-off from the US in the second half of his term, until the impact of the Covid-19 crisis. In his opinion, the increase in the tax burden will harm the economic recovery and the stabilization of the labor market, which has not yet recovered. five million of the jobs it lost in the spring of last year, with the onset of the pandemic.