Who are the rich who Biden wants to pay more taxes?
Joe Biden is set to outline some of the details of a new $3 trillion infrastructure package next week which will include tax increases on wealthy Americans and corporations.
President Joe Biden is scheduled to visit Pittsburgh on Wednesday where he will reveal details of a huge $3 trillion infrastructure and spending package which will contain funds for infrastructure – roads, rail and bridges as well as a permanent expansion of the child tax credit, free community college and child care aid, investment into sustainable energy systems and technology. Biden’s package, billed, Build Back Better also includes plans to hike taxes, with Americans most wealthy individuals and businesses most likely to take a hit.
Proposed changes to the top tax bracket
Biden promised to raise taxes when he was out on the campaign trail back in the autumn. His plan is to increase federal tax revenue by $3.33 trillion between 2021 and 2030. Raising the corporate tax rate from 21% to 28% would bring in about $1 trillion over 10 years. A further $1 trillion could be raised by levying higher income taxes on individuals or households earning more than $400,000; those who are currently in that bracket ($207,351 to $518,400 for individuals, $414,701 to $622,050 for married couples filing jointly) are currently taxed at 35% but that would rise to 37% under the top tax bracket ($400,000+).
He also plans to target large companies who for so long have used loopholes, cross-border tax avoidance and complex accounting instruments to pay lower taxes. Big tech companies such as the Silicon Six - Amazon, Facebook, Google, Netflix, Apple and Microsoft have been accused of avoiding tax by shifting revenue and profits through tax havens or low-tax countries. Biden hopes to change that with the so-called Amazon Rule – by implementing a 15% minimum corporate tax rate on net annual income for corporations making over $100 million a year and tax increases on profits earned abroad from 10.5% to 21%.
When it emerged that Amazon had effectively paid no federal taxes at all for the 2018 fiscal year, Biden tweeted, "I have nothing against Amazon, but no company pulling in billions of dollars of profits should pay a lower tax rate than firefighters and teachers." According to tax transparency campaign group Fair Tax Mark, Amazon paid just $3.4bn in tax on its income during 2000-2018 despite achieving revenues of $960.5bn and profits of $26.8bn. Facebook meanwhile, paid just $7.7bn in income taxes over the same period, despite making profits of $75.5bn and revenues of $173.1bn which works out as a tax rate of 10.2% of profit, lower than any of the other businesses in the Silicon Six.