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Democrats say the hikes will address inequity in the tax code. As congressional Democrats are pushing to make permanent several elements of the $1.9 trillion COVID-19 spending bill, the Biden administration is gearing up for the biggest round of federal tax hikes since 1993. The administration is realizing that the U.S. may eventually have to pay for some of the massive spending sprees that President Joe Biden and Democrats have still in the works. «Unlike the $1.9 trillion Covid-19 stimulus act, the next initiative, which is expected to be even bigger, won’t rely just on government debt as a funding source,» report Nancy Cook and Laura Davison of Bloomberg. While it’s been increasingly clear that tax hikes will be a component—Treasury Secretary Janet Yellen has said at least part of the next bill will have to be paid for, and pointed to higher rates—key advisers are now making preparations for a package of measures that could include an increase in both the corporate tax rate and the individual rate for high earners…. For the Biden administration, the planned changes are an opportunity not just to fund key initiatives like infrastructure, climate and expanded help for poorer Americans, but also to address what Democrats argue are inequities in the tax system itself. The plan will test both Biden’s capacity to woo Republicans and Democrats’ ability to remain unified. «His whole outlook has always been that Americans believe tax policy needs to be fair, and he has viewed all of his policy options through that lens,» said Sarah Bianchi, head of U.S. public policy at Evercore ISI and a former economic aide to Biden. «That is why the focus is on addressing the unequal treatment between work and wealth.» Administration officials told Bloomberg that Biden won’t seek a direct wealth tax of the sort proposed by Sen.
