Democratic presidential candidate Joe Biden proposed on Dec. 4 to raise taxes on the wealthy and corporations by at least $3.4 trillion over the course of a decade to invest in infrastructure, higher education and healthcare as part of his policy plans if elected.
According to the proposal which details his potential future plans, the former vice president proposed a measure to target companies such as Amazon.com Inc. and Netflix Inc. that have, for several years, reported paying no federal income taxes, reported Bloomberg who obtained a copy of the outline.
Biden aims to raise an estimated $400 billion through his minimum tax of 15 percent on the income the most profitable companies report on their books, his campaign states. The money would then go towards a $1.7 trillion investment to pay for proposed climate change and other infrastructure development.
The former vice president earlier this year criticized Amazon’s $0 federal tax bill in 2018 and said no company making billions in profits should pay a lower tax rate than firefighters and teachers. Amazon has said it pays “every penny” it owes.
Prior to the release of Biden’s latest proposal on Wednesday, the 77-year-old had largely spoken about pushing forward policies that could not get through Congress from when he served as vice president during the Obama administration, as well as rolling back aspects of the 2017 Republican tax cut.
The new measures will see the corporate tax rate rise to 28 percent from 21 percent, a rise in 2.6 percent on the top rate on individuals from 37 percent to 29.6 percent, and the taxing of unrealized capital gains at death. Biden proposes to invest $750 billion each in healthcare and higher education by taxing high-income earners, and charging a higher rate on wealthy people’s capital gains and dividends.
Companies with a net income of at least $100 million that do not pay federal and foreign income taxes of at least 15 percent would have a minimum tax imposed under Biden’s plans, according to the proposal.
Biden’s proposals are still less aggressive than those of competing presidential candidates Sen. Elizabeth Warren (D—Mass.) and Sen. Bernie Sanders (I—Vt.), who both aim to raise a much larger amount of tax revenue from the wealthiest Americans and businesses.
Warren, 70, proposed an “Ultra-Millionaire Tax” earlier this year that would place “an annual 2 percent tax on every dollar of net worth above $50 million and a 3 percent tax on every dollar of net worth above $1 billion.”
If rich people try to leave the United States if the tax is passed, it would include a 40 percent “exit tax” on the net worth above $50 million for any American citizen who renounces their citizenship.
Warren upped the proposed tax on billionaires in her recently released Medicare for All plan. “Today, I’m going one step further. By asking billionaires to pitch in six cents on each dollar of net worth above $1 billion, we can raise an additional $1 trillion in revenue and further close the gap between what middle-class families pay as a percentage of their wealth and what the top one-tenth of one percent pay,” she wrote.
Warren also proposed multiple new taxes, including additional taxes on capital gains.
Sanders, meanwhile, he’d raise taxes on nearly all Americans to pay for his socialist Medicare for All plan, proposing a specific tax for the first time. The 78-year-old told an audience last week that he would levy a 4 percent income tax on those making more than $29,000 a year.
While Sanders has said before that taxes will increase for the middle class to pay for Medicare for All, he hadn’t gone into specifics.
Stef Feldman, Biden’s campaign policy director, said in a statement that the candidate “is committed to being transparent with the American people about the smart and effective ways he’d pay for the bold changes he’s proposing.”
Reuters and Zachary Stieber contributed to this report.
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Author: Isabel van Brugen