President-elect Joe Biden suggests returning individual and corporate tax rates to levels not seen since George W. Bush was president.
In an interview with the New York Times, the former vice president said one of his top priorities is to get a second coronavirus bill passed even before he is sworn in as president. Biden went on to say doing so would help generate economic growth without sacrificing the future, as long as everyone pays their fair share.
“And by that fair share, I mean there’s no reason why the top tax rate shouldn’t be 39.6 percent, which it was in the beginning of the Bush administration,” Biden said. “There’s no reason why 91 Fortune 500 companies should be paying zero in taxes.”
The nation’s highest marginal income tax rate was 39.6% for Americans earning at least $374,000 before Bush cut taxes in 2001 and 2003 to 35%. Those cuts remained in place until 2013, when President Obama and Congress returned the rate to 39.6% due to the housing crisis.
The rate stayed at that level until President Trump’s Tax Cuts and Jobs Act was passed in 2017, which cut the corporate rate from 35% to 21% and the individual rate to 37%.
Biden has repeatedly said he will roll back Trump’s Tax Cuts and Jobs Act, restoring the corporate tax rate to 28% and the top income rate to 39.6%, although Biden said he wouldn’t raise taxes on anyone making less than $400,000.
Biden’s plan however, largely depends on the two Georgia Senate runoffs. If Democrats win the runoffs, they will have control of the House, Senate and the White House.
CNBC reported Wednesday 58% of chief financial officers for North American-based multinational corporations do not believe Biden will be able to pass a corporate tax hike within the first two years of his administration.
“Absent single party control, it will be extremely challenging for the Biden Administration to legislatively roll back the 2017 tax reform,” Caroline Harris, the U.S. Chamber of Commerce’s vice president, tax policy and economic development, and chief tax policy counsel, wrote in an email to CNBC.