House Dems unveil plan to tax wealthy, corporations to pay for infrastructure plan

House Democrats proposed hiking taxes on big corporations and the wealthy Monday. The increased funding from the tax hike would go to pay for President Joe Biden’s $3.5 trillion infrastructure plan.

The Democrats’ proposal is to bump up the top tax rate to 39.6 percent on couples earning more than $450,000 per year. There would also be a 3 percent surtax on Americans making more than $5 million per year. The proposal would also raise the 21 percent corporate tax rate to 26.5 percent on incomes beyond $5 million.

Ways & Means Committee Chair Rep. Richard Neal said the proposals would “expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.” White House Deputy Press Secretary Andrew Bates said the tax plan “makes significant progress towards ensuring our economy rewards work and not just wealth”.

The proposals come as a key lynchpin in the infrastructure plan’s passage reiterated that he would not support the plan as it currently stands.

“I cannot support $3.5 trillion,” Sen. Joe Manchin said Sunday. Pressed repeatedly about a price tag he could support, Manchin said “It’s going to be $1, $1.5 (trillion)”. He said the range was based on a modest rise in the corporate tax rate to 25 percent, a figure he believes will keep the U.S. globally competitive.

The senator also cautioned there was “no way” Congress will meet the goal set by House Speaker Nancy Pelosi for passage. She is seeking a House vote by Oct. 1, which is just after the Sept. 27 timeline for voting on a slimmer infrastructure plan favored by moderate lawmakers.

Democratic congressional leaders have set a target of Wednesday for committees to have the larger bill drafted.

“We don’t have the need to rush into this,” Sen. Manchin said. He has urged Congress to act first on the smaller plan already passed by the Senate. But liberal Democrats have threatened to withhold their support until the larger bill is passed alongside it.

Democrats have no votes to spare if they want to enact the plan. The Senate is split 50-50, with Vice President Kamala Harris serving as the tiebreaker if there is no Republican support.