President Biden proposed an array of tax hikes in his annual budget request to Congress that would dramatically raise the rates paid by corporations and wealthy Americans.
The president laid out the tax hikes Thursday as part of his sweeping budget blueprint for federal spending in fiscal 2024, which begins in October. The higher taxes would be borne largely by Wall Street and the top sliver of U.S. households.
The proposals are unlikely to garner support in a deeply divided Congress, and face almost certain rejection from Republicans who won control of the House last year.
Here is a closer look at some of the biggest tax hikes and most significant changes included in the measure:
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The budget proposed raising the top personal-income tax rate to 39.6%, from 37%, for Americans earning $400,000 or more. That increase would reverse part of the Trump-era Tax Cuts and Jobs Act.
Biden's plan would raise the federal capital gains tax rate to 39.6% from 20% for households earning more than $1 million.
Taxes on long-term capital gains – generally classified as an asset that is held for more than one year – currently range from 0% to 20%, depending on a person's income. Wealthier investors are also subject to an additional 3.8% tax on long- and short-term capital gains that is used to fund ObamaCare. Short-term capital gains on assets sold within a year are typically taxed as ordinary income.
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The president also called for increasing the 3.8% ObamaCare tax to 5% for those earning at least $400,000 in an effort to shore up Medicare.
Under the proposal, the wealthiest taxpayers could face a federal rate as high as 44.6% when they sell stocks, properties and other assets.
The president is pushing for a 25% minimum tax rate U.S. households worth more than $100 million, or about 0.01% of Americans.
Although the White House did not provide many details about the proposal, a previous billionaire minimum tax introduced by the president targeted both the income and unrealized capital gains of the ultra-wealthy.
Biden called for quadrupling the 1% levy on corporate stock buybacks that was added to the tax code last year by Democrats as part of the Inflation Reduction Act.
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The proposal would increase the tax from 1% to 4% and would reduce the differential tax treatment between share repurchases and dividends, the White House said.
The budget proposal would lift the corporate tax rate to 28% from 21%, rolling back a key part of Trump's tax law. The measure also calls to increase taxes U.S. companies owe on their foreign earnings to 21% – nearly double the current 10.5% rate.
