Joe Biden’s U.S. administration announced a tax increase plan worth $3.6 trillion (about 4014 trillion won) over the next 10 years.
NYT “Biggest Tax Plan in Modern History”
Corporate tax, federal income tax, capital gains tax increase
Democrats, including Republicans, also expressed concern
On the 28th (local time), the US Treasury Department announced plans to reform taxation for businesses and the wealthy, including raising corporate and income taxes. The tax revenues secured in this way are used for the’US job plan’, which focuses on investment in new industries and infrastructure, and the’American family plan,’ which promotes human investment and restoration of the middle class. Earlier, US President Biden said he would invest about 4 trillion dollars (about 4460 trillion won) on the plan.
According to data released by the Ministry of Finance, the highest corporate tax rate for large corporations is raised from 21% to 28%. Earlier, the Donald Trump administration lowered the corporate tax rate from a maximum of 35% to 21%. In addition, regulations on’tax evacuation’ by multinational companies and taxation on overseas profits of US companies will also be strengthened.
The Biden administration predicted that it would secure $2 trillion in tax revenue over the next 10 years through tax increases on businesses, Bloomberg News reported.
It also strengthens the symptoms of the wealthy. Annually, the highest federal income tax rate for married couples with a combined income of $599,300 (approximately 570 million won) and individuals earning more than $452700 (approximately 500 million won) is raised from 37% to 39.6%. In addition, the capital gains tax for individuals with capital gains of more than $1 million (approximately 1.1 billion won) on assets held for more than one year is raised by 39.6% from the current maximum of 20%. However, as promised, it is a policy that annual income less than 400,000 dollars (about 454 million won) will be excluded from the tax increase.
In addition, this tax reform includes $1.2 trillion (about 1338 trillion won) in tax credits for clean energy, electric vehicles, low-income families, and housing construction, Bloomberg reported.
Finance Minister Janet Yellen said on the 28th, “The US job plan and US family plan centered on infrastructure and human investment will make the US strong and prosperous after Corona 19. You will have it.”
The New York Times (NYT) analyzed that it is “the largest tax increase plan in modern history,” and that “companies will bear a significant portion of the astronomical budget.”
However, in order for such a tax reform to become a reality, it must go beyond the threshold of Congress. The Republican Party is already fiercely opposing the tax increase. Moderate Democrats, including Joe Manchin and Senator Mark Warner, have also expressed concern over the corporate tax increase and capital gains tax, Bloomberg reported.
Chief policy officer Neil Bradley of the US Chamber of Commerce told NYT on the 28th, “The increase in employers and investments proposed by the US administration will be the only obstacle to the recovery of the US economy.” “It will make the largest corporations in the world pay the highest taxes in the world.”
According to NYT and Bloomberg News, “It is unlikely that Biden’s tax reform will pass through Congress as it is.”
Reporter Seok Kyung-min [email protected]