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The White House increased the scope of planned tax hikes by approximately $2 trillion to assuage concerns among some officials about the impact President Biden’s costly infrastructure plan would have on US economy’s long-term health, according to a report Monday.
Top Biden economic officials initially circulated a proposal in February that called for $1 trillion in tax increases to offset the cost of Biden’s plan, a wide-ranging initiative that would include spending on physical infrastructure projects and efforts to combat climate change, the Washington Post reported. Some officials raised concerns that the gap between the project’s cost, pegged at roughly $3 trillion, and the tax hikes would eventually result in a surge in federal debt payments.
A revised version of the plan for more than $3 trillion in tax increases to fund federal spending of as much as $4 trillion on the infrastructure plan, the newspaper reported, citing sources with knowledge of the matter. Biden is expected to provide more details on his plan, including the potential tax increases, at an event in Pittsburgh on Wednesday.
MANCHIN CALLS FOR 'ENORMOUS' INFRASTRUCTURE BILL FUNDED BY NEW TAXES
"We'll have more to say about it once we actually roll out the package, but what we want to make clear, the president has a plan to fix our infrastructure and a plan to pay for it," White House Press Secretary Jen Psaki said at a Monday briefing.
The first part of Biden’s legislative push will focus on physical infrastructure projects, green energy investments and efforts to boost domestic manufacturing. Details on the second part of the plan, focusing on policy goals such as enhanced child care, will be unveiled in April.
YELLEN SAYS HIGHER TAXES NEEDED IN LONG TERM TO FINANCE US SPENDING
Biden pledged to raise taxes for the wealthiest Americans on the campaign trail. During a recent interview with ABC, the president said that anyone earning more than $400,000 annually would see a “significant tax increase,” while Americans earning below that threshold “won’t see one single penny in additional federal tax.”
Both Biden’s infrastructure plan and the corresponding tax hikes face a difficult path to approval in the Senate. The Democrats would have to garner support from moderates on both sides of the aisle to move forward with the president’s agenda.
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Last week, Sen. Joe Manchin of West Virginia, a key moderate Democrat, suggested he would support an infrastructure package costing as much as $3 trillion, so long as it would not result in a significant increase to the national debt. At the time, Manchin said the corporate tax rate should be increased to at least 25%.
Republicans widely oppose Biden’s plan to increase the corporate tax rate, which dropped to 21% from 35% during the Trump administrations. Critics argue a corporate tax hike would hurt economic growth and incentivize companies to outsource jobs.
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GOP lawmakers have also accused the Biden administration of pushing forward with a partisan agenda even as the president calls for bipartisan unity. A number of Republicans spoke out after Democratic Senate leadership enacted special budget rules to pass Biden’s $1.9 trillion coronavirus relief package with a simple majority vote, rather than the 60 votes typically required.
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