US Democratic Party Considers Raising Corporate and Individual Income Tax Rates

[Asia Economy Reporter Yujin Cho] The Wall Street Journal (WSJ) reported on the 24th (local time) that the Democratic Party is considering raising corporate and individual income taxes to secure funding for the infrastructure investment plan promoted by U.S. President Joe Biden.

The $3 trillion bill under review by the White House consists of two parts: investments in infrastructure such as roads, bridges, and water supply, and investments focused on education and poverty alleviation.

The tax increase plan is also being considered to include a corporate tax hike in the infrastructure bill, while raising taxes on high-income households would be bundled into a second package and handled later.

The White House plans for President Biden and his economic team to finalize the bill within a few days, and President Biden is expected to unveil the bill in a speech in Pittsburgh, Pennsylvania, on the 31st.

According to a senior Democratic aide, House Speaker Nancy Pelosi said in a meeting last week that raising the corporate tax rate and capital gains tax rate are possible options. Senate Majority Leader Chuck Schumer reportedly had lengthy discussions with the White House over various options last weekend.

The WSJ stated that the new bill is expected to face a more challenging process than the recently passed $1.9 trillion stimulus package.

The Republican Party opposes new spending and broad tax increases, arguing that they would hinder economic recovery. There is also skepticism within the Democratic Party about bundling tax policies with large-scale investment bills.

Sources expect the tax increase plan to be based on President Biden’s campaign promises. Biden pledged to raise the corporate tax rate from 21% to 28% and increase the top income tax rate for high earners with annual incomes over $400,000 from 37% to 39.6%.

In an interview with ABC last week, President Biden said that Americans earning less than $400,000 annually would not be affected by the tax increase. Some aides believe the final tax increase will be smaller than Biden’s campaign promises.

Lobbyist and former Senate Finance Committee Democratic aide Mac Campbell said, "The size of the infrastructure package and the tax provisions included will be determined by what Senate Democratic moderate members can accept."

This content was produced with the assistance of AI translation services.