Biden plans biggest tax hike in nearly 30 years to bolster economic recovery

The president, Joe Biden, plans to carry out the

first major federal tax increase since 1993

, with the aim of supporting his long-term economic recovery program after the relief package for the coronavirus pandemic. Bloomberg news.

Although the White House has rejected a direct wealth tax, as proposed by Democratic Sen. Elizabeth Warren, it does appear to target big business and wealthier people, as the president promised during his campaign, in which he pledged to

not raise taxes on those who earn less than $ 400,000 annually.

The tax increase is likely to include repealing some aspects of former President Donald Trump's 2017 tax law, which benefits corporations and the wealthiest, as well as making other changes to make the tax code more progressive. sources familiar with the plan told the Bloomberg agency.

[Have you checked your bank account yet?

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These are

some of the proposals

that are under consideration, according to these people, who asked not to be named since the discussions are private:

• Increase the corporate tax rate from 21% to 28%.

• Reduce tax preferences for so-called transit companies, such as limited liability companies or associations.

• Increase the income tax rate for people who earn more than $ 400,000.

• Expand the scope of the wealth tax.

• A higher tax rate on capital gains for people who make at least $ 1 million a year.

What has been the economic and social impact of the pandemic in the country?

March 12, 202102: 25

White House economist Heather Boushey said in an interview with Bloomberg TV Monday that Biden has no intention of raising taxes on people who

earn less than $ 400,000 a year

.

But for "the people at the top who have been able to benefit from this economy and have not been so affected, there is a lot of room to think about what kind of revenue we can raise," he said.

[Yes, Biden is proposing a 40% income tax on home sales.

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Unlike the $ 1.9 trillion stimulus package signed by Biden on Thursday, the next initiative, which is expected to be even bigger, will not rely solely on public debt as a source of funding.

But since each tax exemption and credit has its own lobby behind it, changing rates is fraught with political risk.

This helps explain why the tax increases in Bill Clinton's 1993 reform differ from the modest changes made since then.

For the Biden administration, the planned changes are an opportunity not only to fund key initiatives such as infrastructure, climate and scaling up aid to millions of poorer people, but also to address what Democrats argue are

inequalities in the tax system itself

, and which the coronavirus pandemic has exacerbated.

With information from 

Bloomberg

.