President Biden is committed to fulfilling a key campaign promise and raising taxes on high-income earners amid growing evidence that many wealthy Americans benefited financially from the coronavirus pandemic.
Heather Boushey, a member of the White House Council of Economic Advisers, told Bloomberg News on Monday that “2020 really did show him that there were so many of the fragilities across society” that need to be addressed.
For instance, the wealthiest 1% of U.S. households saw their collective fortune grow by more than $4 trillion last year, buoyed by record-high stock prices and an increase in property values. By comparison, the bottom 50% saw their fortunes increase by just $470 billion, according to Federal Reserve data.
At the same time, 80% of job losses last year affected the lowest 25% of wage earners – while those in the top half of income-earners actually saw gains in employment, according to a February paper published by the left-leaning Economic Policy Institute.
The Biden administration is currently laying the groundwork for another massive economic relief package, with senior Democratic officials proposing as much as $3 trillion in new spending on a jobs and infrastructure bill that would become the foundation of Biden’s “Build Back Better” program.
The bill is widely expected to serve as a vehicle for a slew of tax hikes, including: raising the corporate tax rate to 28% from 21%, raising the income tax rate on individuals earning more than $400,000, expanding the estate tax, creating a higher capital-gains tax rate for individuals earning at least $1 million annually and paring back tax preferences for so-called pass-through businesses.
Top Republicans are already balking at the prospect of raising taxes, with Senate Minority Leader Mitch McConnell saying last week that there will not be bipartisan support for such a move.
The Chamber of Commerce has also raised concerns about hiking the corporate tax rate, saying it would “make the United States a less attractive place to invest profits and locate corporate headquarters.”