U.S. tax update
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Democrats in the House of Representatives want to reduce Joe Biden’s proposed tax increases on corporate income and capital gains as part of a $2.9 trillion tax increase plan for the President of the United States to expand the social safety net.
According to people familiar with the matter, the draft tax plan was circulated among members of the House Ways and Means Committee on Sunday, which is responsible for tax legislation in the lower house of Congress.
According to the plan, the US corporate tax rate will be raised from the current 21% to 26.5%-lower than the 28% set by Biden earlier this year.
House Democrats also hope to increase the tax paid by investors on capital gains from the current 20% to 25%-significantly lower than Biden’s planned 39.6% tax rate, which is his goal of taxing ordinary income.
However, Democrats in the House of Representatives proposed a 3% surcharge on people with annual incomes of more than $5 million, which would target the wealthiest American families. Biden did not support such additional taxes.
Despite the changes compared to its own proposal, the White House responded enthusiastically to the plan.
“[It] By cutting taxes for middle-class families, we have made significant progress in ensuring that our economic returns work and not just wealth; reforming the tax law to prevent the outsourcing of American jobs; and ensuring that the wealthiest Americans and large companies pay their fair share,” White House spokesman Andrew Bates said.