The U.S. could see even more stimulus.
Weeks after pitching a $2 trillion infrastructure plan, President Biden is expected to lay out plans for a $1.8 trillion proposal. This one, called the American Families Plan, will include spending on child care, education, and extensions on tax breaks.
To pay for it, the Administration could raise the top income tax rate to 39.6% from 37% for those making more than $1 million. Biden may also raise the top tax rate on capital gains and dividends to 39.6% from 20%. In addition, he may require estates to pay taxes on unrealized capital gains of more than $1 million, or $2.5 million per couple.
He also wants to send $80 billion to the IRS to strengthen enforcement against top earners.
While it could struggle to get through Congress, here’s what in the plan, according to CNBC.
- $225 billion toward high-quality child care and ensuring families pay only a portion of their income toward child-care services, based on a sliding scale
- $225 billion to create a national comprehensive paid family and medical leave program
- $200 billion for free universal preschool for all 3- and 4-year-olds, offered through a national partnership with states
- $109 billion toward ensuring two years of free community college for all students
- $200 billion to make permanent the $1.9 trillion Covid stimulus plan’s provision lowering health insurance premiums for those who buy coverage on their own
- Extending through 2025, and making permanently fully refundable, the child tax credit expansion that was included in the Covid relief bill
- Making permanent the recent expansion of the child and dependent care tax credit
President Biden is expected to outline his plan tonight at 9 EST. He’s also expected to address proposals to address the issue of climate change, which could fuel upside in green stocks.
“The president has been clear that our tax system is broken when a hedge fund manager making hundreds of millions of dollars is paying taxes at a lower rate than the janitor working in his office or the housekeeper at his mansion,” White House senior adviser Anita Dunn said, as quoted by Bloomberg. “And he’s going to take steps — steps which are supported by the American public — to address the fairness in the tax code.”