WASHINGTON: Top Democrats in the U.S. House of Representatives said Monday they seek to raise the nation’s top tax rate on corporations to 26.5%, up from 21% today.
The powerful House Ways and Means Committee said it will debate legislation this week that would achieve change as part of the Democrats’ broader $ 3.5 trillion national investment plan.
The tax writing panel has scheduled working sessions for Tuesday and Wednesday to discuss tax policy and other issues under its jurisdiction that will be included in the $ 3.5 trillion “reconciliation” bill.
House Ways and Means Speaker Richard Neal will seek committee approval of the tax changes that are aimed at helping pay for the $ 3.5 billion bill to expand social services for the elderly and the elderly. children and tackling climate change.
Neal wants to set a gradual corporate tax rate of 18% on annual income under $ 400,000, 21% on income up to $ 5 million, and 26.5% on income over $ 5 million.
His proposal would also increase the capital gains tax rate for those with income over $ 400,000 to 25% from the current 20% and include an additional 3% surcharge on taxable income in excess of $ 5 million.
So far, the broad legislation by Democrats has not attracted the support of any Republicans, who have been adamant in defending their 2017 tax cuts from the changes proposed by Democrats.
House Speaker Nancy Pelosi aims to have a full vote in the Democrat-controlled House on the $ 3.5 trillion bill, or a somewhat reduced measure, as soon as the end of this month.
In a statement, the committee’s Democrats said that in addition to raising corporate taxes, it will include a provision in its bill to “level the playing field by lowering taxes for our nation’s smallest businesses.”
Currently, the federal tax rate on corporations is 21%, down from 35% before the 2017 Republican tax restructuring.
President Joe Biden, a Democrat, had proposed raising the current corporate rate to 28% and the capital gains rate to 39.6% for those with incomes greater than $ 1 million. While the plan pushed by Democrats on the committee would set that rate lower than what Biden originally sought, it would capture many more taxpayers with higher taxes on capital gains.
Even if the committee adopts these proposals, the Democratic leaders of the House of Representatives are likely to make some changes in a bid to win the unanimous support of the 50 Democrats in the 100-seat US Senate for the proposed legislation.