House Democrats spelled out their proposed tax increases on Monday, pushing higher rates on corporations, investors and high-income business owners as they try to piece together enough votes for legislation to expand the social safety net and combat climate change, the Wall Street Journal reported. The plan would increase the top corporate tax rate to 26.5% from 21%, impose a 3-percentage-point surtax on people making over $5 million and raise capital-gains taxes — but without the changes to taxation at death sought by the Biden administration. The tax increase details were the last major missing piece in the Democratic agenda, and their release will accelerate lawmakers’ negotiations over which new spending to give priority to and which tax increases they find acceptable. Democrats have few votes to spare in the House and none in the Senate, and moderate Democrats, such as Sen. Joe Manchin (W.Va.), have called for a narrower proposal with smaller tax hikes than the ones outlined Monday. Republicans are expected to mount unanimous opposition to the proposal, which would reverse many of the GOP tax cuts from 2017. In several areas, the committee proposed tax increases that weren’t as far-reaching as those the Biden administration has sought. It didn’t include the administration’s proposed curbs on oil-and-gas companies’ tax breaks or a provision opposed by banks that would have required annual reporting on account flows to the Internal Revenue Service. The House plan doesn’t change the income-tax rules that allow unrealized capital gains to go untaxed at death. Rural Democrats had opposed that administration capital-gains plan, and its chances of becoming law are looking slimmer.
