Democrats' New Economic Plan Revealed, Calls for Mammoth $2.9 Trillion Tax Hike
The package of tax cuts approved four years ago under then-President Donald Trump will be in tatters if Democrats get their way with plans to fund a $3.5 trillion spending spree.
House Democrats have circulated a draft plan that includes about $2.9 trillion in new taxes, according to The Washington Post.
The proposal would raise the top tax rate on Americans earning over $435,000 from 37 percent to 39.6 percent, according to the report. Some corporations would see a tax increase from 21 percent to 26.5 percent under the plan.
As part of progressives’ efforts to tax wealth, a “surtax on high-income individuals” for Americans earning more than $5 million is in the plan, with an estimated haul of $127 billion.
White House spokesman Andrew Bates said the proposal “makes significant progress toward ensuring our economy rewards work and not just wealth” while upholding President Joe Biden’s promise to undo Trump’s tax cuts in a way that does not raise rates on Americans who earn less than $400,000 annually.
House Speaker Nancy Pelosi aims to have the House version of the revenue proposal completed this week, the Post reported.
But there are tensions on the Democratic side between those on the extreme left of the party and the more moderate members.
Democratic Sen. Joe Manchin of West Virginia has said he does not support spending $3.5 trillion and the plan “will not have my vote” as it now stands.
Manchin said Democrats need to be smart in the way they dole out tax credits and other perks.
“I support child tax credits. Let’s see how we’re doing, let’s make sure we’re getting it to the right people,” he said, according to the Post. “There’s no work requirements whatsoever. There’s no education requirements whatsoever for better skill sets.
“Don’t you think if you want to help the children, the people should make some effort?”
But Sen. Bernie Sanders of Vermont said cutting back the $3.5 trillion was “absolutely not acceptable to me, I don’t think it’s acceptable to the president, to the American people, or to the overwhelming majority of the Democratic caucus.”
“I believe we’re going to all sit down and work together and come up with a $3.5 trillion reconciliation bill, which deals with the enormously unmet needs of working families,” Sanders said.
But Manchin said on CNN that with the money Congress has already thrown around, a bit of patience is necessary.
“We’ve already put out $5.4 trillion and we’ve tried to help Americans in every way we possibly can and a lot of the help that we’ve put out there is still there and it’s going to run clear until next year, 2022, so what’s the urgency? What’s the urgency that we have?” the senator said.
“It’s not the same urgency that we had with the American Rescue Plan. We got that out the door quickly. That was about $2 trillion.”
Republicans are expected to oppose the plan.
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