WASHINGTON — President Biden on Friday admitted that his $2 trillion infrastructure plan would bring tax increases to some people who earn $200,000 — while insisting that a separate hike on businesses “will not slow the economy at all.”
Biden for weeks has said that his proposed hike on the highest income tax bracket would not hit any person who earns less than $400,000.
But his updated phrasing confirms Press Secretary Jen Psaki’s recent acknowledgment that a two-partner family would be impacted if combined income crosses $400,000.
Biden told reporters at the White House that his infrastructure plan would be paid for by those who can afford higher taxes.
“It is a once in a generation investment in our economic future, a chance to win the future — paid for by asking big corporations, many of which do not pay any taxes at all, just to begin to pay their fair share. And it won’t raise a penny of tax on a family making less than $400,000 a year, no federal tax, no addition,” he said.
The president’s description of the tax hike as applying to any “family” that makes more than $400,000 per year is a significant change from his earlier remarks, and could mean families on the cusp of affluence in areas with high costs of living are impacted.
By contrast, Biden said on Wednesday at a speech in Pittsburgh unveiling the tax increase and infrastructure plan, “No one making under $400,000 will see their federal taxes go up. Period.”
In an interview last month with ABC News, Biden said, “If you make less than $400,000, you won’t see one single penny in additional federal tax.”
Biden also said Friday, “Raising taxes, the studies show, will not slow the economy at all. Asking corporate America just to pay their fair share will not slow the economy at all. It will make the economy function better. It will create more energy.”
Psaki and White House Chief of Staff Ron Klain insisted Thursday that businesses would be able to bear tax hikes as they rebuild following the COVID-19 pandemic.
Biden spoke after surprisingly strong job growth figures for March that indicated nearly 916,000 new jobs were created, lowering the unemployment rate to about 6 percent.
Biden’s plan would boost the corporate tax rate from 21 percent to 28 percent. It was lowered in 2017 by former President Donald Trump’s tax reform law from 35 percent. The plan also would impose new taxes on overseas business profits and could include an increase on capital gains taxes on investments like stocks and real estate.
Republicans in Congress oppose tax increases, but Democrats who narrowly hold the House and Senate may attempt to ram through the bill under special budget reconciliation rules that avoid the usual 60 votes needed in the Senate.
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