Biden Will Seek Tax Increase on Rich to Fund Child Care and Education

Democrats on Capitol Hill have urged Mr. Biden to make that credit permanent. Analysts say the credit would drastically cut child poverty this year. Those pushing Mr. Biden include Senators Michael Bennet of Colorado, Cory Booker of New Jersey and Sherrod Brown of Ohio, along with Representatives Rosa DeLauro of Connecticut, Suzan DelBene of Washington and Ritchie Torres of New York.

“Expansion of the child tax credit is the most significant policy to come out of Washington in generations, and Congress has an historic opportunity to provide a lifeline to the middle class and to cut child poverty in half on a permanent basis,” the lawmakers said this week in a joint statement. “No recovery will be complete unless our tax code provides a sustained pathway to economic prosperity for working families and children.”

Mr. Biden also wants to incorporate some type of extension for an expanded earned-income tax credit, which was included in the earlier aid package on a one-year basis.

The plan’s spending and tax credits will total around $1.5 trillion, according to administration estimates, in keeping with early versions of the two-step agenda first reported last month by The New York Times.

To offset that cost, Mr. Biden will propose several tax increases he included in his campaign platform. That starts with raising the top marginal income tax and the tax on capital gains — the proceeds of selling an asset like a stock or a boat — for people earning more than $1 million. The plan would effectively increase the rate they pay on that income to 39.6 percent from 20 percent.

Capital gains income would also still be subject to a 3.8 percent surtax that helps fund the Affordable Care Act. It was unclear if the tax increase would also apply to income earned from dividends.

The president will also propose eliminating a provision of the tax code that reduces taxes for wealthy heirs when they sell assets they inherit, like art or property, that have gained value over time. And he would raise revenue by increasing enforcement at the Internal Revenue Service to bring in more money from wealthy Americans who evade taxes.

Article source: https://www.nytimes.com/2021/04/22/business/economy/biden-taxes.html