Biden unveils reversal of Trump’s tax cuts for most wealthy

President Joe Biden will call for reversing his predecessor Donald Trump’s tax cuts for the wealthy to pay for huge middle-class families spending program, senior administration officials said Wednesday.

Biden will use his speech to a joint session of Congress to unveil the $1.8 trillion American Families Plan, funded by ending Trump’s tax cuts and closing loopholes used by the most wealthy to escape paying their share, officials said.

“The president will be proposing a set of measures to make sure the wealthiest Americans pay the taxes that they owe, while also ensuring that no one making less than $400,000 a year will see their taxes go up,” one official, who asked not to be identified, told reporters.

The spending plan, which will need approval by a deeply divided Congress, would pour money into early education, childcare, higher education and other building blocks in what the Biden administration argues will be the reconstruction of the country’s battered middle class.

Some $800 billion would be sent out in tax cuts for lower-income people and another $1 trillion would be invested.

The strategy, an official said, is “to build back better and generate a strong and inclusive economy for the future.”

Tax credits will cut child poverty and halve the price of childcare, allowing mothers to remain longer in the labour force, the official said, predicting “a larger, more productive and healthier workforce.”

The plan to pay for the huge government program will likely be a lightning rod for Republican members of Congress.

But the White House is banking on voter support by targeting the tax increases firmly at the super rich.

They would pay a top income tax rate of 39.6 percent, ending the reduction to 37 percent enacted under Trump.

The Biden plan would also end loopholes and capital income tax breaks, while raising “billions,” according to the White House in tighter taxes on inherited wealth.

Officials said that the measures would be enough to pay for the nearly $2 trillion spending program within 15 years — and make the country fairer.

“The president’s plan makes clear where we should be reducing the tax burden and where he thinks we should appropriately increase taxes,” an official said.

“There is broad support among the American people for this approach, there’s broad support for the American people for the investments these resources will go to,” he said.

“These reforms are fundamentally about fairness in the tax code.”