US House Democrats aim to raise top corporate tax rate to 26.5% – Times of India

WASHINGTON: Prominent Democrats in the US House of Representatives said on Monday they are seeking to raise the nation’s top tax rate on corporations to 26.5% from the current 21%.
The powerful House Ways and Means Committee said it would debate legislation this week that would achieve change as part of Democrats’ broader, $3.5 trillion domestic investment plan.
The tax-writing panel has scheduled working sessions for Tuesday and Wednesday to debate tax policy and other matters that are within its jurisdiction to be included in the $3.5 trillion “reconciliation” bill.
House Ways and Means Speaker Richard Neill will seek committee approval of tax changes that aim to expand social services for the elderly and children and help pay for a $3.5 trillion bill to tackle climate change .
Neil wants to set a graduate corporate tax rate of 18% on annual income less than $400,000, 21% on income up to $5 million, and 26.5% on income over $5 million.
His proposal would increase the capital gains tax rate from the current 20% to 25% for people with income over $400,000 and include an additional 3% surcharge on taxable income over $5 million.
So far, Democrats’ sweeping legislation hasn’t attracted the support of any Republicans, who have been adamant on defending their 2017 tax cuts from Democrats’ proposed changes.
House Speaker Nancy Pelosi aims to have a full vote on the $3.5 trillion bill in the Democratic-controlled House – or a somewhat reduced measure – as soon as later this month.
In a statement, the committee’s Democrats said that in addition to raising corporate taxes, it would include a provision in its bill to “level the playing field by cutting taxes for our nation’s smallest businesses.”
Currently, the federal tax rate on corporations is 21%, down from 35% prior to the 2017 Republican tax reorganization.
President Joe Biden, a Democrat, proposed raising the current corporate rate to 28% and the capital gains rate to 39.6% for those with incomes above $1 million. While the plan pushed by Democrats on the committee would set that rate lower than Biden’s originally intended, it would catch far more taxpayers with higher capital gains taxes.
Even if the committee accepts these proposals, House Democratic leaders are likely to make some changes in an effort to garner unanimous support for the proposed legislation from 50 Democrats in the 100-seat US Senate.