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The plan calls for top corporate and individual tax rates of 26.5% and 39.6%, respectively, according to a summary released by the tax-writing Ways and Means Committee. It includes a 3% surcharge on income above $5 million and a capital gains tax of 25%.
It’s unclear how much the tax increases would raise and if the new revenue would offset the full investment in social programs. Democrats could ultimately cut the legislation’s price tag as centrists balk at a $3.5 trillion total.
The tax proposals may change before Democrats craft the final bill they hope to pass in coming weeks. The Ways and Means Committee will debate tax policy when it resumes its markup of the mammoth spending package this week.
Senate Democrats will also have their say in the tax proposals. Sen. Joe Manchin, D-W.V., has called for a corporate rate of 25%, lower than the one favored by House Democrats. He has also expressed concerns about the plan adding to budget deficits.
The party will need votes from every member of the Senate Democratic caucus and all but three House Democrats. Senate Majority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., aim to pass the legislation through the budget reconciliation process without Republican support.
The House tax plan would not go as far as President Joe Biden initially hoped. The president had called for a 28% corporate tax and a 39.6% capital gains rate.
This story is developing. Please check back for updates.
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