…President to propose $1.8 trillion ‘American Families Plan’
…Education expansions, tax cuts financed by tax hikes on rich
President Joe Biden will unveil on Wednesday a sweeping $1.8 trillion plan to expand educational opportunities and child care for families, funded in part by the largest tax increases on wealthy Americans in decades — the centerpiece of his first address to a joint session of Congress.
Called the American Families Plan, Biden’s third major legislative proposal combines $1 trillion in spending with $800 billion in tax cuts and credits for middle- and lower-income families.
The plan would make pre-kindergarten and community college free across the country, extend the child tax credit through 2025 and make permanent an expansion of the earned income tax credit to childless adults with low incomes, provide direct support to families for child care, finance teacher training and create a national paid family leave program.
The proposal follows on the heels of a $2.25 trillion infrastructure plan that has yet to be taken up by Congress and a $1.9 trillion pandemic relief plan that Biden has signed into law. Together, the measures would remake the U.S. tax code and social welfare programs, vastly expanding federal support even for families that consider themselves upper-middle class while substantially shifting the overall tax burden to the wealthy.
“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 wrote Tuesday in a memo obtained by Bloomberg News. “And he’s going to take steps — steps which are supported by the American public — to address the fairness in the tax code.”
Taken together, Biden’s proposals illustrate the president’s ambitions after nearly 100 days in office. Elected to pull the U.S. out of the coronavirus pandemic and its associated economic crisis, Biden now seeks to use the presidency to reshape and reorient the economy and the lives of middle-class Americans.
Making the earned income tax credit expansion permanent would help an estimated 17 million low-income workers, while extending the child tax credit would benefit an estimated 66 million kids, the White House said.
Biden’s tax hikes include raising the top rate for individuals back to 39.6%, changing the treatment of capital gains so that wealthy people don’t benefit from lower rates on their investment income, eliminating the so-called “carried interest” provision that benefits fund managers, and greatly increasing funding for the Internal Revenue Service to enforce tax collection and audit wealthy taxpayers.
His proposals are uncertain in Congress, where Democrats hold a working Senate majority only by virtue of Vice President Kamala Harris’s tie-breaking vote.
Dunn’s memo cited a handful of polls showing that the majority of Americans support measures such as raising the corporate tax rate and capital gains taxes on people earning more than $1 million a year.
‘Key’ to Future
Another White House aide, David Kamin, the deputy director of the National Economic Council, described Biden’s latest proposal as a plan aimed at improving American child-rearing and education and thus the country’s very future.
“There is very good evidence, at this point, that policies like the child tax credit end up in better outcomes for kids,” Kamin said in an interview. “You can look at it in terms of test scores, in terms of future earnings. So, these are important ways of helping families right now, but they’re also key to the future.”
Biden will outline his latest plan during his prime-time speech, scheduled to begin at 9 p.m. EDT on Wednesday, when he’ll also celebrate early accomplishments of his presidency including an accelerated vaccination campaign that has helped reduce U.S. Covid-19 cases and deaths. He’ll also discuss his proposals to combat climate change and his foreign policy, particularly the U.S. relationship with China, a person familiar with the speech said.
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