Would workers or shareholders pay for President Joe Biden's corporate tax hike proposal?

Democrats may soon be raising taxes on the rich, as lawmakers pivot to priorities beyond Covid pandemic relief.

A change in the way Uncle Sam taxes the wealth, capital gains and estates of the super wealthy may be on the table, according to tax experts.

The White House and congressional Democrats have eyed higher taxes to raise trillions of dollars in additional revenue to, for example, improve the country’s infrastructure and combat climate change.

President Joe Biden and his advisors are considering up to $3 trillion in new spending for such endeavors, The New York Times reported Monday.

There’s a chance sweeping changes to the tax code may not come to pass, especially if they require Republican backing. But the richest Americans can expect at least some kind of tax hike, experts said.

“The question we’re really dealing with now is not whether tax rates will rise, but when, and which taxes?” said Alison Hutchinson, a managing director and senior wealth planner at Brown Brother Harriman in New York.

Capital gains taxes

At its core, Biden’s tax plan centers on raising taxes for Americans earning more than $400,000 (it’s still unclear whether that’s for families or per individual). The plan would boost the top income tax rate and tax more of their income for Social Security, for example.

And Biden would increase levies more for millionaires and billionaires.

For example, he wants to tax long-term capital gains at the same rate as wages for households making more than $1 million a year.

Wealthy Americans currently pay a 37% rate on wages and a lower 20% rate on investment earnings (plus a 3.8% surtax).

The Biden tax plan would up the capital gains tax for millionaires to 39.6% — the same rate at which the president would tax job income for high earners.

Treasury Secretary Janet Yellen told the Senate in January that this change to capital gains taxes was a long-term goal of the Biden administration.

“We recognize that our tax system cannot be tilted toward corporate interests and the wealthy, while those that are sustained predominately by wages bear an unequal burden,” she said in written testimony during her confirmation hearing.

The capital gains policy could stretch beyond the consistently rich, though.

That could happen if a business owner who makes $75,000 a year sells their company for more than $1 million, for example, said Robert Keebler, a tax advisor and certified public accountant in Green Bay, Wisconsin.

“You could argue that’s fair for a Wall Street tycoon making a lot of money each year, but it might not seem so fair to a guy who sells his business one year,” Keebler said.

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.


Connect with CNBC News Online

#CNBC
#CNBCTV

[guillermoalonzodon]

If you own a 401k or IRA we will all pay.

[paybrookman]

You can’t have it both ways don’t want your taxes to go up but you” voted “for the guy who told you he was going to rise them

[umrengnr]

If you think companies are going to pay under either corrupt democrats or corrupt gop, you have not been paying attention. They have a good thing going where they all make money and we get the bill.

Reduce the size of govt and return the power to the people and local govts.

[walterwang]

Billions of dollars were shifted back to US after Trump tax cut, not because of the lower corporates tax rate, but because of something called Base erosion tax that fines corporations for shifting money overseas. In terms of incentive you can't win against Ireland and its 0.0001% corporate tax rate.

[_TheMatrix]

Hey its more propaganda to make poor people feel bad about rich people getting taxed.

[Wongseifu]

The problem with shifting money overseas now is that their are fewer options than their were before 6 months ago. China would be the logical example if it was not for the fact that they are clamping down on companies that have gotten too big/potential to become a threat and Europe is heavily regulated. Fewer options to make that sort of play anymore

[arsimckhoi]

Why do you guys trust heritage foundation on this matter?

[antonpopov]

Bitcoin heading to 250k with this guy leading the US.

[reaperdragon]

Yes, they made more money from tax cuts which raises the market value. The problem is there is ZERO trickle down as you like to pretend happens and all that money just gets harded in other country's and threw loop holes so they don't pay anything in taxes.

[jamietree]

Investing in crypto now should be in every wise individuals list, in some months time you'll be ecstatic with the decision you made today.

[enidankavon]

People will pay the Corporate tax hike through more fees added to our bills. Wake up people!!

[bob___]

In our system, tax burdens are disproportionately borne by those who have enough to have something they can pay but not so much that they are able to hire lobbyist to obtain legislative provisions to allow them to avoid paying. Otherwise, the tax code wouldn't be so incredibly complicated. That suggests workers are more likely than large corporations to pay more as a result of a tax increase.

[MrLRowe]

Big business have been getting away with passing the bill to the people for too long. Pay your FAIR amount

[rosemariebredahl]

Corps will exploit any changes unless & until they push it so far that they force Government intervention.

[blackburn]

I still wonder how i would have been coping without the professional broker Mrs Stephanie i got introduced to by my employer some weeks ago while the pandemic was still new to the people of USA 🇺🇸 first i was scared but now am testifying for others.

[Ohpeaches]

The US only collects around 3 Trillion per year, they would have to increase the 1%ers taxes by 100% just to be able to afford this and that wont happen. What they do is use hiden taxes to tax the middle-class and the poor by just printing more money and cause inflation so they don't have to directly say they are taxing the poor. The last 1.9 Trillion that everyone got 1400 bucks will cause around 2-3% inflation, so say a family spends 40, 000 in 1 year that 1.9 Trillion package will cost that family 1, 000 per year in hiden taxes for life. That is how they tax the middle class and poor....i would take 1, 000 per year for life over a 1 time payment of 1, 400 bucks anyday.

[deepblueacc]

Do any of the USA know what is buy backs?

[taylorswiftnumberon]

Taxes are a cost of doing business. When the cost of doing business goes up the cost is passed along to the end user. So yeah YOU are going to pay more taxes one way or another.

[Amauryk]

Do these people realize regular people own stocks too smh clueless

[ftecconn]

As long as they Do Not Raise Taxes on people making over $100k a Year - All is Good.