WASHINGTON – President Joe Biden is poised to raise taxes on America’s wealthy if re-elected this fall, battling Republican challenger Donald Trump, who has promised even deeper tax cuts if he returns to the White House.
Main parts 2017 Trump tax cuts It is scheduled to expire at the end of 2025, leaving the two sides divided over whether to extend it or end it. Keeping them would add $3.3 trillion to the debt over the next 10 years. according to nonpartisan Congressional Budget Office. Democrats are united in a push to raise taxes on high-income earners, while Republicans want to keep tax breaks. The White House and Congress will determine the outcome.
Biden promises to end Trump tax breaks for incomes above $400,000, while promising not to raise taxes on lower earners.
“If Trump is elected, he and his rich friends will cut taxes at the expense of working families. We can’t allow that.” Biden said on social media last week.
Biden has repeatedly targeted Trump’s high income tax breaks. says in April: “The tax reduction is about to expire. If I am re-elected, the term will expire.”
Biden’s latest budget and a memorial Thursday Lael Brainard, Biden’s chief economic adviser, laid out the White House’s vision for bringing in new revenue: raise the corporate tax rate from 21% to 28%, impose a 25% minimum income tax on billionaires, increase marginal tax rates on the highest incomes. From 37% to 39.6%, and increase taxes on capital gains for high earners.
On the campaign trail, Trump touts the 2017 tax cuts and hits out at Biden on the issue.
“He wants to let our tax cuts expire!” Trump said this at a rally in Wildwood, New Jersey, last month. “Instead of a Biden tax increase, I’m going to give you a Trump middle class, upper class, lower class, business class — big tax cut. The biggest tax reduction will be you.”
But his plan isn’t concrete, and it’s not about the rising national debt, an issue Republicans worry about. Trump did not even mention the 2017 tax cuts during a closed-door meeting with Republicans Thursday, according to three senators in the room. Now he is proposing a different idea that he did not implement during his presidency: end taxes on tips.
Democrats: “End Trump’s Really Harmful Tax Provisions”
Many liberals are eager to fight when Trump’s tax cuts expire, and Senate Finance Committee Chairman Ron Wyden, D-Ore., said he plans to meet with committee Democrats this Thursday to discuss the way forward.
Sen. Elizabeth Warren, D-Mass., said in a speech Monday: “The 2025 tax fight will present a great opportunity to break with decades of tax-cutting political orthodoxy and reshape the tax code to reflect our nation’s values by raising taxes. the wealthy. That’s what Americans across the country are demanding, and that’s what Joe Biden is trying to do, and that’s a big reason why Joe Biden won in November. “Next year, we should increase the taxes of huge corporations and billionaires.”
DN.Y., representing the suburban swing region. Rep. Pat Ryan said that with Trump’s “damaging” tax cuts ending, “2025 is the year we can finally make the ultra-wealthy and big corporations pay their fair share.” .”
He said it was important to bring more revenue to the Treasury to protect Social Security and Medicare in the long run, and accused Republicans of wanting to cut pension benefits “to pay for these bailouts and tax breaks” for the rich.
“So this is a one-two punch for working people and 99% of the American people,” Ryan said.
Meanwhile, Republicans stand behind Trump’s desire to continue tax cuts.
“We need to make sure these tax cuts are extended,” said RSC Rep. Ralph Norman, who sits on the Rules Committee, which decides which bills get a vote in the full House. “We will be under Trump’s leadership. We will not be under Biden.”
Sen. Mike Crapo, R-Idaho, the ranking member of the tax-writing Finance Committee who could become chairman if Republicans take control of the Senate, rejected Biden’s call for a tax hike on incomes above $400,000.
“No, I don’t want to go with that,” Crapo said.
He said it may require “some fine-tuning” if the tax cuts are extended, “but I’m not going to draw any arbitrary lines.”
Rep. Andy Barr, R-Ky., said he wants to see Trump’s tax cuts “permanent” and build on them. “I would like to see more and more aggressive supply-side tax cuts, growth-oriented tax cuts,” he said. “I would also like to see more sensible capital gains tax cuts.”
Obstacles to Biden’s plan
Biden’s promise to eliminate tax cuts for incomes above $400,000 is easier said than done. For example, the 2017 tax cuts nearly doubled the standard deduction used by many middle-income families. And many Democrats favor ending the $10,000 federal limit on state and local tax deductions, which would allow many high earners to pay less. It’s unclear how Biden would rewrite the tax code to end those breaks only for high earners and preserve them for others.
A White House official said the economic team has yet to come up with a specific policy proposal on how to achieve that goal, and that there are “different ways to try to implement our principles.” The official also said it would be difficult to say whether Congress should move quickly to impose a tax on the wealthiest people in early 2025 and use the filibuster reconciliation process, which covers taxes and spending and could allow Democrats to bypass Republican opposition. it’s still early. Congress.
Wyden said it will be a high priority next year and that Democrats in Congress share a philosophy on taxes with Biden.
“You bet we’re going to have significant discussions about the president’s proposal,” he said. “I’ve talked to the Biden administration about this: Success and justice are incompatible. We want people to do well, and under our approach, people will do well. But if nurses, teachers and firefighters have to pay taxes with every salary, we want some justice from billionaires.
Beyond the presidency, the makeup of Congress will determine what Trump’s tax cuts will be. Full control could give both sides a clear path to pursue their agendas, but a divided government could force both sides to negotiate a bilateral deal that includes some wins for each side.
Warren urged Democrats on Monday to “not take the coward’s way out and sign a half-assed deal that lets the rich off the hook,” warning that such a move would be a “colossal failure.”
Rep. Carlos Gimenez, a Republican who represents a competitive district in Florida, said that if Republicans keep the House, even if Biden is re-elected, any push to raise taxes, including on high earners, will disappear.
He said that Trump’s tax cuts should be extended.
“I like what it’s doing for our economy,” he said. “I’m a lower tax guy.”