House Dems have proposed a tax reform that would increase the taxes for millionaires on average by nearly 11 percent. According to the Joint Committee on Taxation, the reform would be in effect for 2023 and would actually lower taxes for middle and low-income families.
Meanwhile, taxes for the wealthy and corporations would be higher while raising $2-plus trillion over the span of a decade. The additional monies would provide funding for climate mitigation while expanding the safety net for the U.S.
A household earning at least $1 million or more would see a tax increase by nearly 11 percent in 2023. According to projections from analysts, that would be an added $96,000 on taxes paid as their tax rate would increase from 30.2 percent to 37.3 percent on average.
The proposed policy would also cut taxes for Americans earning less than $200,000. For instance, a household with an income of $20,000 to $30,000 would see an 87 percent reduction in 2023 for federal taxes. This would amount to a tax savings over time of $18,700.
Households earning between $200,000 to $500,000 would see their tax bill rise by 0.3 percent or $2,900 annually.
If it came to pass, the new legislation would increase the top income tax rate margin to 39.6 percent while also increasing the upper limit of the federal rate to capital gains taxes from 20 percent to 25 percent. Households with $5 million or more annual income would see a 3 percent surtax, as well as other increases.
Meanwhile, the Joint Committee on Taxation says individual and corporate tax provisions would raise $2-plus trillion over the span of a decade.
The House Dems hope to retain the expansion of the child tax credit put in place in July by this year’s American Rescue Plan.
Childcare, pre-K education, community college education, paid leave, public health insurance, incentives for green energy, and other tax credits for households would also see fund expansions if the act should go through. In the interim, proposed legislation suggests that the child tax credit be expanded through 2025.
Once the expansion ends, certain low to middle-income households would have a slight tax increase, from less than 1 percent to 1.5 percent in 2027.