Democrats look to hike taxes on the rich and corporations to pay for $3.5 trillion budget bill

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The draft proposal, which could still change before it is expected to be officially released on Monday, calls for increasing the top marginal rate on individuals to 39.6%, up from the 37% rate set by the Republicans’ 2017 tax cut law, according to a plan circulating Sunday and obtained by CNN.

The rate would apply to individuals with taxable income over $400,000 a year and married couples filing jointly earning over $450,000 annually.

The top capital gains rate would increase to 25%, from 20%.

In addition, lawmakers would slap a 3% surtax on individuals with adjusted gross incomes in excess of $5 million.


The proposal also calls for increasing the top corporate tax rate to 26.5%, up from the current 21% set by the Republicans’ 2017 tax cut law. It would only apply to businesses with income in excess of $5 million.

President Joe Biden had called for hiking the corporate rate to 28% to pay for his economic recovery agenda. Prior to the 2017 law, the top rate was 35%.

The plan would also increase a variety of other taxes on the wealthy and businesses, among other measures, raising an estimated total of $2.9 trillion.

This is a breaking story and will be updated.

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