During the presidential campaign, Mr Biden proposed trillion dollar tax hikes for businesses and the rich, but his plans failed due to a complete repeal of Mr Trump’s tax law. He said he would only raise income taxes in the top brackets to pre-Trump levels, up from 37 percent to 39.6 percent. He called for the corporate tax rate to be raised from 21 percent to 28 percent where Mr Trump set it – still below the maximum of 35 percent that preceded the law.
Even Mr Biden’s international tax plan, designed to encourage domestic investment and job creation while increasing large business revenues, would work within the limits of what Mr Trump and Republicans did in 2017. Rather than abolishing the overhaul, Mr Biden would double the tax rate – while removing a new exemption that Democrats say encourages corporate investment overseas.
The result is that Mr Trump’s cuts in 2017 will set tax policy in place for years to come, said George Callas, executive director of Steptoe, a Washington law firm who advised spokesman Paul D on the tax cut and jobs bill Ryan from Wisconsin. Mr. Callas said the Biden Plan “in a sense admits that the new architecture of the international tax system that the TCJA has created will be accepted as the future architecture.”
Democrats say the changes Mr Biden is proposing to the law will rebalance his incentives to invest and attitudes toward the United States while ensuring that businesses and the rich pay their “fair share” in taxes.
Senator Ron Wyden of Oregon, the new chairman of the finance committee who will be the starting point for all Senate tax changes Mr. Biden makes, said in an interview that his top tax priorities were in many ways the same as Mr. Biden’s.
This includes capping a deduction for high earners who run businesses that are not organized as corporations and revising the overseas investment in qualified business asset exemption – the provision that Democrats say encourages offshoring even though Republicans like Mr Callas disagree . Mr. Wyden also wishes to collect taxes on heirs with great wealth and on capital gains for high earners in a variety of ways.
“There is a wide range of Senate Democrats who agree that the 2017 bill was a giveaway for the rich and multinational,” said Wyden. “Certainly there is support for the withdrawal of the tariff regulations for companies, whereby the individual tariff will be raised again.”