Biden plans to use his upcoming State of the Union address to call for tax increases on large corporations and the wealthy as part of his reelection campaign platform.
He will propose raising the corporate tax rate from 21% to 28% and imposing a 25% minimum tax on households worth over $100 million.
The White House estimates these measures could raise $3 trillion in revenue over 10 years to reduce deficits.
Congressional Republicans oppose these tax hikes and instead want further cuts for corporations and the wealthy.
“Congressional Republicans want to cut taxes even more for the wealthy and big corporations, all while adding more than $3 trillion to the debt,” White House National Economic Council director Lael Brainard said. “President Biden has made clear whose side he’s on.”
Biden’s proposals aim to partially reverse the corporate tax cuts enacted under Trump from 35% to 21%.
His plan would also limit business deductions for executive pay over $1 million.
However, Biden’s proposals to tax the rich could be impacted by a pending Supreme Court case on whether Congress can tax unrealized capital gains, which his wealth tax proposal relies upon.
Several legal groups argue such a tax would be unconstitutional.
“If a tax on unrealized investment holdings like the Mandatory Repatriation Tax can be treated as an ‘income’ tax, anything can be treated as an income tax. And if anything can be treated as an income tax, then the Sixteenth Amendment’s limitation to ‘income’ taxes is meaningless,” the libertarian CATO Institute wrote.
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