President Joe Biden delivers the State of the Union address before a joint session of Congress on Mar. 1, 2022 in Washington.
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President Joe Biden reiterated his promise during the State of the Union Tuesday night not to raise taxes on households with less than $400,000 of annual income to fund his domestic agenda.
Biden called for higher taxes on the wealthy to pay for initiatives that would largely benefit low and middle earners. They include universal pre-kindergarten, expanded access to health insurance, energy-related tax credits and lower costs for prescription drugs, childcare, and home and long-term care for seniors.
Biden’s $400,000 income threshold equates to roughly the top 1% to 2% of taxpayers. Biden has used that demarcation line as a North Star for tax policy since his presidential run.
“And under my plan, nobody earning less than $400,000 a year will pay an additional penny in new taxes. Nobody,” Biden said Tuesday night.
“The one thing all Americans agree on is that the tax system is not fair,” he said. “We have to fix it.
“That’s why I’ve proposed closing loopholes so the very wealthy don’t pay a lower tax rate than a teacher or a firefighter,” he added.
However, Biden’s domestic agenda has been stalled for months in Congress. It’s unclear if and when lawmakers will resurrect the pillars of Biden’s Build Back Better plan, and if they do whether it will be in a comprehensive package or something more piecemeal.
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The House passed legislation last year with key pillars of the president’s Build Back Better plan intact. However, lawmakers couldn’t pass a bill in the evenly divided Senate, amid opposition from Sens. Joe Manchin, D-W.V., and Kyrsten Sinema, D-Ariz.
The House bill’s tax provisions aimed at the wealthy were stripped down from the White House’s initial vision, in search of compromise.
The legislation would have raised more than $640 billion from the wealthiest households over a decade, according to a November estimate from the Joint Committee on Taxation, a nonpartisan scorekeeper for Congress.
It would have imposed a 5% tax surcharge on those making more than $10 million a year and applied a 3.8% surtax across a broader swath of wealthy business owners, for example.
