President Joe Biden will propose a tax hike on investment gains of the wealthiest individuals to help pay for his massive infrastructure and jobs package, a top White House economist said Monday.
Biden is expected to lay out his plan this week for $2 trillion in investments to create millions of jobs, and has said higher taxes on the rich and corporations will offset the hefty price tag.
The increased tax on profits earned from sales of stocks and other assets will only impact those earning $1 million a year, a narrow sliver of American taxpayers — about 500,000 — said Brian Deese, head of the White House National Economic Council.
“This change will only apply to three tenths of a percent of taxpayers, which is not the top 1 percent, it’s not even the top one half of 1 percent,” he told reporters, citing 2018 tax filing data.
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The change will help “to offset the long term cost of those investments by making reforms to our tax code that reward work and not just wealth,” Deese said.
He did not provide any details of the new higher tax, but media reports last week cited officials saying Biden will increase the capital gains tax rate to 39.6 percent from 20 percent.
Biden also proposed raising the official corporate tax rate to 28 percent from 21 percent, partially reversing former president Donald Trump’s 2017 corporate tax cut.
In addition, Biden’s plan would increase the minimum tax on businesses to 21 percent, “ending the ability of multinationals to shield income in tax havens from US taxes.”
The far-reaching infrastructure package unveiled late last month would shore up the nation’s highways, bridges and ports, as well as fund telecommunications upgrades plus research and development to boost competitiveness, especially compared to China.
But it also includes broadband internet, clean drinking water and upgraded childcare facilities and schools as part of the investments.
“It will be a plan that will provide critical support for children and families, and in by doing so, critical support for our economy,” Deese said.
Biden is due to address a joint session of Congress on Wednesday night.