The decision of the Biden administration to raise taxes came as an unpleasant surprise for wealthy Americans. Local billionaires will face their first major tax hike in 28 years. The government has contemplated the plan for a good while. It was stirred into action by the pandemic. The country needs money to patch budget holes and fund a large-scale economic relief package of almost $2 trillion. The US chose to shift the financial burden onto the rich and super-rich Americans instead of imposing it on ordinary citizens.
The corporate tax rate is likely to increase to 28% from 21%. At the same time, the government is set to abolish a row of taxes for limited liability companies (LLC). On top of that, President Biden considers whether to raise the income tax for people earning more than $400,000 per year and maintain a higher tax rate for those earning more than $1 million per year. Biden has long said that Americans want a fair tax policy. Therefore, he is now pressing the plan ahead.
Earlier, a group of senators led by Elizabeth Warren proposed a wealth tax on ultra-millionaires. If policymakers bring in the Ultra-Millionaire Tax Act, American billionaires will have to pay billions of dollars in tax deductions. As for average citizens, 85% of households will receive payments of $1,400 per person. In addition, the $300 weekly unemployment benefits will be extended through September.
