Democrats on the House Ways and Means Committee will debate a proposed legislation seeking a substantial roll-back of Trump-era tax cuts, including raising the top tax rate on corporations to 26.5%
Democrats on the powerful House Ways and Means Committee said they will debate legislation this week that would achieve the changes as part of their broader, $3.5 trillion domestic investment plan.
Even if the legislation as proposed passes Congress and is signed by Democratic President Joe Biden, corporate taxes would still be lower than they were before the enactment of the tax cuts pushed through by Republicans in 2017. But the top individual income tax rate would revert to its pre-2017 level.
Neal, a Massachusetts representative, wants to set a graduated corporate tax rate of 18% on annual income below $400,000, 21% on income up to $5 million and 26.5% on income above $5 million.Currently, the federal tax rate on corporations is 21%, down from the 35% rate that was in effect prior to the 2017 Republican tax restructuring. Biden had proposed raising the current corporate rate to 28%.
Neal's proposal also would increase the capital gains tax rate for those with incomes above $400,000 to 25% from the current 20% and include an additional 3% surcharge on taxable income in excess of $5 million. And in an attempt to reduce carbon emissions, Democrats are seeking sizeable tax credits for the purchase of electric vehicles.So far, the Democrats' wide-ranging legislation has not attracted the support of any Republicans, who have been adamant in defending their 2017 tax cuts and argue that the tax hikes would hurt businesses and kill jobs. Democrats argue the Trump tax restructuring favored the wealthy while Republicans credit it for helping spur economic growth.
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