House Democrats are plotting a huge tax raid on the wealthy, businesses and investors to raise $2.9billion to cover the cost of President Joe Biden's domestic plans, leaked documents reveal.
The plans are a major rollback of Donald Trump's tax cuts and will see the corporate rate hiked from 21 per cent to 26.5 per cent according to the draft proposal circulating among Democrats on the House Ways and Means Committee.
Democrats are also expected to propose a 3 per cent surtax on individual income above $5million, which alone will raise $127billion.
House Democrats are plotting a huge tax raid on the wealthy, businesses and investors to raise $2.9billion to cover the cost of President Joe Biden's domestic plans
They are also considering raising the minimum tax on U.S. companies' foreign income to 16.5 per cent from 10.5 per cent and the top capital gains tax rate to 28.8 per cent from 23.8 per cent.
The raid is not as aggressive as Biden had proposed earlier in the year but will still hit Americans hard, the plans obtained by Business Insider reveal.
Individuals who earn over $400,000 will receive a top tax rate of 39.6 per cent while married couples taking in more than $450,000 together will also be taxed at the same rate.
The capital gains increase, which taxes profits from assets, will target those earning above $400,000 despite the White House previously saying it would only apply to those earning more than $1million a year.
The plans are a major rollback of Donald Trump's tax cuts and will see the corporate rate hiked from 21 per cent to 26.5 per cent
Businesses with incomes lower than $400,000 will see their tax rate fall to 18 per cent and the hike only applies to firms taking in more than $5million.
The Wall Street Journal first reported the outline of the proposal, citing a congressional aide.
A spokesman for the House Ways and Means Committee, which is responsible for tax policy, did not immediately respond to a request for comment.
In a statement, White House spokesman Andrew Bates said House Democrats are making 'significant progress towards ensuring our economy rewards work and not just wealth by cutting taxes for middle class families; reforming the tax code to prevent the offshoring of American jobs; and making sure the wealthiest Americans and big corporations pay their fair share.'
The overall package of tax changes, summarized in a four-page document circulating among lobbyists and congressional aides on Sunday, was estimated to raise $2.9trillion in new revenue, largely covering the costs of President Joe Biden's $3.5trillion domestic investment plan.
The huge 10-year spending plan addresses Biden's main priorities on education, climate change, immigration and expands the social safety net.
The package also includes $80billion more in additional funding for the Internal Revenue Service specifically devoted to tax enforcement of high income taxpayers, which could raise as much as $200billion in additional revenue.
Tobacco and nicotine will see further taxes to raise an estimated $100billion, while $16billion will be raked in by changing the rules to 'treat cryptocurrency the same as other financial instruments'.
Firms will also be prevented from shifting profits abroad to tax havens in a bid to avoid paying their share in the US.
The plans are a significant unwinding of the cuts implemented under Trump in 2017.
White House spokesman Andrew Bates said the proposal 'makes significant progress toward ensuring our economy rewards work and not just wealth'.
He added it satisfies Biden's promise to repeal Trump's tax cuts without targeting lower-income households.
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