WASHINGTON (AP) — House Democrats unveiled a sweeping proposal Monday for tax hikes on big corporations and the wealthy to fund President Joe Biden's $3.5 trillion rebuilding plan, as Congress speeds ahead to shape the far-reaching package that touches almost all aspects of domestic life.

The proposed top tax rate would revert to 39.6% on couples earning more than $450,000, and there would be a 3% tax on wealthier Americans making beyond $5 million a year. For big businesses, the proposal would lift the 21% corporate tax rate to 26.5% on incomes beyond $5 million.

In all, the tax hikes are in line with Biden’s own proposals and would bring about the most substantive changes in the tax code since Republicans with then-President Donald Trump slashed taxes in 2017. Business and anti-tax groups are sure to object. But Democrats are pressing forward.

Rep. Richard Neal, D-Mass., the chairman of the tax-writing Ways & Means Committee, said taken together, the proposals would “expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.”

It's a daunting moment for Biden and his allies in Congress as they assemble the massive package that is destined to become one of the largest singles measures considered in some time, if ever. The president's “build back” agenda includes spending on child care, health care, education and strategies to confront climate change. It is a sweeping undertaking, on part with the Great Society or New Deal.

One Democratic senator vital to the bill’s fate says the cost will need to be slashed to $1 trillion to $1.5 trillion to win his support.

Sen. Joe Manchin, D-W.Va., also cautioned there was “no way” Congress will meet the late September goal from House Speaker Nancy Pelosi, D-Calif., for passage given his current wide differences with liberal Democrats on how much to spend and how to pay for it.

“I cannot support $3.5 trillion,” Manchin said Sunday, citing in particular his opposition to a proposed increase in the corporate tax rate from 21% to 28% and vast new social spending. “We don’t have the need to rush into this."

Democrats have no votes to spare if they want to enact Biden’s massive “Build Back Better” agenda, with the Senate split 50-50 and Vice President Kamala Harris the tiebreaker if there is no Republican support. Democratic congressional leaders have set a target of Wednesday for committees to have the bill drafted.

The White House welcomed the preliminary tax plan, which “makes significant progress towards ensuring our economy rewards work and not just wealth,” said deputy press secretary Andrew Bates.

“This meets two core goals the President laid out at the beginning of this process -- it does not raise taxes on Americans earning under $400,000 and it repeals the core elements of the Trump tax giveaways for the wealthy and corporations,” he said in a statement.

The proposal was pitched as potentially raising some $2.9 trillion — but that’s a preliminary estimate. That would go a long way toward paying for the $3.5 trillion legislation. The White House is counting on long-term economic growth to be sparked by the legislation to generate an additional $600 billion to make up the difference.

Much of the revenue raised would come from the higher taxes on corporations and the highest earners — more than $450,000 for married couples filing jointly, to 39.6% from the current 37%.

Pressed repeatedly about a price tag he could support, Manchin said, “It’s going to be $1, $1.5 (trillion).” He suggested the range was based on a modest rise in the corporate tax rate to 25%, a figure he believes will keep the U.S. globally competitive.

But Sen. Bernie Sanders, the Vermont independent who chairs the Senate Budget Committee and is helping craft the measure, noted that he and other members of the liberal flank in Congress had initially urged an even more robust package of $6 trillion.

“I don’t think it’s acceptable to the president, to the American people or to the overwhelming majority of the people in the Democratic caucus,” Sanders said. He added: "I believe we’re going to all sit down and work together and come up with a $3.5 trillion reconciliation bill which deals with the enormously unmet needs of working families.”

The current blueprint proposes billions for rebuilding infrastructure, tackling climate change and expanding or introducing a range of services, from free prekindergarten to dental, vision and hearing aid care for older people.

Manchin voted last month to approve a budget resolution that set the figure, though he and Sen. Kyrsten Sinema, D-Ariz., have expressed reservations about the topline amount. All of it would be paid for with taxes on corporations and the wealthy.

Congressional committees have been working hard this month on slices of the 10-year proposal in a bid to meet this week’s timeline from Pelosi and Senate Majority Leader Chuck Schumer, D-N.Y., to have the bill drafted. Pelosi is seeking a House vote by Oct. 1, near the Sept. 27 timeline for voting on a slimmer infrastructure plan favored by moderate lawmakers.

Manchin, who in an op-ed earlier this month urged a “strategic pause” on the legislation to reconsider the cost, described the timing as unrealistic. He has urged Congress to act first on the $1 trillion bipartisan infrastructure bill already passed by the Senate. But liberal Democrats have threatened to withhold their support until the $3.5 trillion spending bill is passed alongside it.

Manchin spoke on CNN’s “State of the Union,” NBC’s “Meet the Press” and ABC’s “This Week.” Sanders was on CNN and ABC.

———

Associated Press writer Marcy Gordon contributed to this report.

(16) comments

veritas

Pity the knee jerk libs, progressives and far lefties. They actually believe the trite, overused hyperbolic tropes they were taught as hippies and millennials about robber barons, blood sucking Republicans, blah, blah, blah. Jacking up taxes on the likes of Walmart, Amazon, Verizon, et al, as has been pointed out by the only sensible response herein as of this time/date, will eventually be passed along to all of us. And, as has also been pointed out, the fantastical tab for this socialist pipedream cannot be picked up by the dastardly rich and corporate components alone. For whom does the tax bell toll? It tolls for thee...

MRS M

veritas, the likes of robber barons Jeff Bezos and Elon Musk can afford to send their fat and narcissistic arses into space. They and their corporations, as well as thousands of others, can well afford to pay their fair share of the burden of running the USofA, including making improvements to the infrastructure and addressing climate , WITHOUT making you apopletic and resorting to promulgating the outright lie that all of a sudden the price of your overloaded Walmart and Amazon carts will now be beyond your considerable means. Man up.....and they should too. There's a cost to the deferred maintenance of the nation....and it's been deferred a long, long time.. Wake up and put on your big boy pants. Even Donald the grifter proudly admitted he was ripping off America away back in 2015 by his non-payment of taxes. His retort: "Change the Laws".Oddly the Party of "fairmindedness and compassionate conservatism" continues to use the fear of rising prices as their main cudgel to protect........who and what now??????? It's idiotic. Get right up behind behind your Donald and advocate for changing the laws to favor fair and equitable taxation for all US corporations being allowed to continue ripping off the USA.

pdl603

Spoken like true lefty loon marxist who doesn’t understand economics. MRS M would have voted for Bernie had her party not screwed him again by picking the brain dead imbecile currently in the white house. You see Bernie said “bread lines are a good thing”. And yes that is where the democrats are taking us.

MRS M

ou may also put on your big boy pants, man up, and start demanding that engorged Corporate wealth begins to pay their fair share to subsidize and run the nation......rather than putting it all on poor folk like yourself. I assure you .....that you'll still be able to afford all your necessities from Walmart...and probably lots of other stuff too.

Riptide262

Raising income taxes on the rich will have very little impact because the rich make their money with capital gains, not ordinary income. A far more useful approach would be to treat all capital gains over 400,000 as income in order to tax the stock awards that executives use as income but are taxed at only 20%. Limit the mortgage deduction and only one home please. Eliminate the stepped up basis loophole that allows all the capital gains made on stock and property to be passed along after death tax free. However, these loopholes are all still in tact and safe because the lobbyists are doing their jobs and the congressmen & senators know who actually owns them.

MRS M

'bout time for the Republican scam not only to be called out (again and again and again) but for America to actually do something about it. 'bout time. The Corporate scammers, tax evaders, selfish robber barons, and Republican politicians who enable them are robbing the average American blind, while the "average American" continues to pay his or her taxes out of their patriotic and civic duty to support America. The Robber barons and corporate thieves? Hardly make a dent in their personal and corporate financial gluttony.

MD1756

Sorry, but those tax hikes won't be enough. I also can't understand how many if not the vast majority of democrats believe in human induced climate change and the insist on policies that make it cheaper and easier for people to choose to have children while our planet continues to change for the worse. Wake up and smell the coffee people/politicians and stop promoting human population growth, instead of making it cheaper, at the very least those who have more than two children should be taxed at a higher rate for being a significant part of the problem. If we were to be equitable even though who have fewer should be taxed more because of the demands they place on government services especially at the state and local level. For those who argue against it, why do you hate the planet, responsibility and equity? Please only respond if you have a rational response and not something stupid like who will take care of me when I'm older or complain that I'm saying I should not pay any taxes to support children when that is not what I'm saying. And please back up any statements with facts or examples of valid studies that show human population growth is good and should continue without any limits.

pdl603

May not raise taxes on those making less than $400000 (yet to be seen), but what the dimwitted democrats don’t understand or maybe they do companies will jack up prices to the consumer. Ultimately, that is a tax hike on lower income individuals.

Hayduke2

Atta boy pdl, support that Republican myth of being the party of fiscal responsibility while giving all the breaks to the wealthy and corporate donors. After all, that's where all their monied interests lie.

MRS M

Yes hay.....a true believer in assorted Republican fanatasies and chimera for the common man, who's still hearing the sound of something "trickling down", but can quite figure out where it's coming from.

pdl603

Dukey, keep on believing that there is an unlimited amount of other people’s money that nitwit democrats can keep taking and nothing will happen. You and your cronies can’t be that stupid can you?

MRS M

Feel that feeling of it trickling down, cd? Eeeewwww. Some lies you just can't ignore anymore, sadly.

MD1756

Ask Hayduke and Mrs M if they believe people should be paid for having children while those who have no children must pay higher taxes even though they require less services from the government and ceteris paribus, have less of a harmful impact on the planet and other species.

MRS M

Please remind ol' MD1756 that the residents of the State anteed up to support HIS education (what there was of it) AND that included many folks who had no children in his day.. The mark of an advanced society.....raising the bar for all for the common good. Try paying it forward instead of looking for a cheap way out. It's a great country.... But it costs to run it, and to educate it in the hopes of raising the standard.of living.. Same with infrastructure...unless 1756 wants to whine about toddlers using the highways, bridges and tunnels more than he does. Selfish. Self-serving. Short-sighted.

MD1756

No, MRS M you are selfish, self serving and short sighted one. Nowhere did I every say my taxes should not support public education. People like you have no ground to stand on from a moral or equitable or environmental argument so you deflect the issue.

You want to talk about the mark of an advanced society, well, it should no longer be supporting the wants of people to have children but it should be about supporting the needs of this planet and other species. Ceteris paribus, those who choose to have children are not supporting the planet and/or other species. How many parents reduce their own GHG before having children. Why do parents think people with no children should pay more income taxes (notice, no where am I saying those without children shouldn't pay taxes or have any of their taxes go to education so get that intentional distortion of the truth out of you mind) when they are not demanding expensive services that parents are demanding and when they are not stressing the planet like people who have families, especially those who have more than two children? Not one of you commenters who complain have advanced a logical argument that is equitable to other tax payers and more importantly that is protective of the planet and other species.

Again you are the one who is Selfish, self serving and short sighted.

As far as paying it forward, I've installed solar and geothermal so that on average, my home energy use is carbon neutral. Have you done that? I also drive a plugin hybrid to greatly reduce my gasoline usage (and any excess electricity I produce with my solar system in part charges my car. How is that not paying it forward. While I worked, I donated significant sums of money to charities that help protect the environment, green space, EJ communities and yes, even St. Judes and Children's National even though I have no children), but I guess that doesn't count towards paying it forward? I'd be willing to put my record of paying it forward next to yours and see how each one stacks up since you bring up all that talk about being selfish. Let's not forget the majority of my career was working at the US EPA (27 years). I could have left the Agency and made more money but I chose to work for the protection of the people. I guess that was selfish and short sighted of me.
< br>Human population growth and policies that support human population growth are a serious problem and need to be addressed. Those who choose not to address that are just pandering to voters rather than being part of the solution. I am not selfish and I am not ignorant, I simply choose to be part of the solution.

MD1756

Mrs M, I forgot to add that in retirement I have helped an environmental organization provide help to communities facing issues from companies not properly controlling their emissions and with reviewing company's permit applications) ... for free (I was offered $120/hour (significantly more than what I earned as a federal employee) for my expertise in RCRA compliance issues and I refused to be paid). That is pretty selfish of me, isn't it.

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