Democrats want to pay for their ambitious $3.5 trillion spending plan, which would remake America’s safety net, by raising taxes on wealthy people and corporations. See details here.
Meanwhile, tax changes sought by House Democrats “would cut annual tax bills for Americans earning less than $200,000 a year through 2025,” Reuters reported on Tuesday, September 14, 2021 (see story here).
A House committee that deals with taxes “estimated that those in lower-income brackets” would initially “pay far less in taxes” under the Democratic scheme beginning with 2023, but by 2027 “those earning between $30,000 and $200,000 would start to see slightly higher tax bills.” For many families, though, that might be offset by the child care subsidies and free community college tuition the spending bill would provide.
Republican tax policies heavily skew in favor of the very rich. In the worst GOP tax proposals, which did not make it very far, only wages would be taxed and wealthy people would pay no income taxes at all. As it was, both the Bush and Trump tax cuts created huge deficits — remember this when Republicans screech about deficits — and most of the tax benefits went to rich people.
What the Democrats are trying to do now would partially, but not completely, reverse those tax cuts and use the money to pay for infrastructure that supports the economy and fund new benefits for working-class and middle-class families.