President Biden got his COVID relief bill through Congress, but an even bigger fight might loom over his next economic initiative. Bloomberg reports Biden aims to engineer the biggest tax hike since 1993 to pay for a slew of programs ranging from infrastructure to the climate to increased help for low-income Americans. Among the possibilities: The corporate tax rate could rise from 21% to 28%; those who make more than $400,000 could pay more income tax; those who make more than $1 million could pay higher capital gains taxes; and the estate tax could be expanded. Parts of former President Trump's tax cuts also could be repealed. A White House economist says the brunt of the increases would hit the wealthiest Americans, with those making less than $400,000 unaffected.
Expect a protracted fight. "We’ll have a big robust discussion about the appropriateness of a big tax increase,” Senate Minority Leader Mitch McConnell said in February. Bloomberg notes that Biden would have to win the support of at least 10 Republicans, and the Hill amplifies what is meant by "at least." Biden will have to fight to keep the support of Democrats in red states, including Joe Manchin of West Virginia. Manchin previously told the Hill that repealing the Trump tax cuts would be "ridiculous," though he did later walk back the comments somewhat. "People would accept the corporate tax raised a few points but beyond that you’re going to have problems, especially in the middle of an economic crisis," an anonymous Democratic lawmaker said last month. (Read more tax hikes stories.)