As Election Day in the United States looms closer amid a tightening race for the White House, Democratic nominee Joe Biden and his top advisers have reportedly revealed that raising taxes would be an immediate priority of their economic agenda if the ex-vice president is elected, writes FOX Business.
The outlet cites sources familiar with Biden’s campaign as confirming that the Democratic candidate has laid bare to Wall Street supporters his sweeping plan for tax hikes targeting wealthy individuals and corporations.
Sources claim the legislation is likely to be introduced almost immediately after Joe Biden takes office in the event that he secures victory in the November presidential elections.
Wall Street executives are quoted as believing that Biden has no misgivings about tax increases due to heartening reports, such as those from Goldman Sachs, that suggest spending plans on infrastructure and other items would potentially counterbalance negative economic fallout from the higher taxes.
A memo cited by the outlet from an investment firm connected with the Biden campaign suggested corporate tax increases would rise to 28 percent from 21 percent.
Biden's corporate tax plan also reportedly includes taxing the foreign earnings of US companies at a rate of 21 percent compared to 10 percent under Donald Trump.
The money companies report they made on public financial statements, or book income, would be allegedly taxed at 15 percent.
Long-term capital gains for millionaires would be increased, thus eliminating the tax advantage for private equity firms, writes the outlet.
Biden previously pledged not to raise taxes on people making less than $400,000.
The inheritance tax would increase from 40 percent to 45 percent, with the threshold for taxable inheritance income lowered to around $5 million compared to $11.5 million.
Battle for the Senate
A Democratic Senate is viewed by Biden’s advisers as a stepping stone that might be instrumental in getting the tax increases passed quickly and without opposition.
The battle for control of the US Senate set to culminate on 3 November is fraught with dramatic consequences, as even if Biden were to defeat Trump, he would be unable to pass legislation on key issues such as healthcare, immigration and climate change unless the Democrats seize a majority.
Currently, the Republicans maintain a 47-53 majority.
However, sources reportedly added that the Democratic presidential contender plans to implement all tax changes retroactively, using a legislative tool known as "budget reconciliation". For this, he would require just 51 votes in the Senate.
The urgency of the rebooted tax legislation, claim sources, is rooted in the need to raise revenue for Joe Biden’s much-touted $2 trillion infrastructure package that focuses on clean energy.
The spending package is seemingly needed to make good on Biden campaign promises to jumpstart the COVID-19 impacted economy, besides addressing the signature climate concerns of the Democratic White House hopeful.
The former Vice President, who seeks to undo US President Donald Trump's Tax Cuts and Jobs Act of 2017, has been campaigning on a professed desire to raise taxes on firms and the wealthy while promising to enact more than "one-dozen middle class tax cuts that will finally give working families the financial support they deserve".
"For four years, Trump has relentlessly pursued an economic agenda that rewards wealth over work and favours multinational corporations over small businesses", said a Biden campaign news release.
A tax hike is suggested as being urged by more practical concerns, claims the outlet, which previously reported that Biden perceives increasing taxes to be a "moral issue".
If elected, Biden would be required to outline a viable budget with means of paying for his proposals not long after taking office in January.
Some economists have voiced their apprehensions over proposals to increase taxes during a coronavirus-driven recession.
They draw parallels with the 2008 financial crisis, when former President Barack Obama and then-vice president Biden postponed tax increases until the economy got back on its feet.
With just slightly over a week to go until the elections, if the Democrats win the presidency, maintain the House and wrest control of the Senate, there will be no avoiding swift tax increases, Wall Street executives close to Joe Biden are cited as forecasting.
There has not been an official comment from Joe Biden’s spokesperson.