First 30k no taxes
For 2021 fiscal year they increased it from 30k to 50k.
Time to learn that DeFi stuff.
https://www.wsj.com/articles/biden-tax-increase-agenda-revived-as-democrats-win-senate-11610025764WASHINGTON Democratic control of the Senate gives President-elect Joe Biden a much stronger chance of
raising taxes on corporations and high-income households.
Until this week Georgia runoff elections, Mr. Biden plans for tax
increases were running into solid opposition
from the Republican-controlled Senate. But now, Democrats will hold the White
House, Senate and House simultaneously for the first time in more than a
decade, and they are poised to use that power.
During his presidential campaign, Mr. Biden proposed
raising taxes on corporations, estates and high-income households, reversing key
parts of the 2017 tax cuts passed by Republicans and reprising policies
that the Obama administration couldn=E2=80=99t get through Congress. Democrats had
spent the time between November=E2=80=99s election and this week runoffs looking
at bipartisan compromises and examining what the administration could do
unilaterally.
Now, some of Mr. Biden's ideas are much more likely to become law,
said Steve Wamhoff of the progressive Institute on Taxation and Economic Policy,
who said that the president-elect's plans are less far-reaching than some
Democratic alternatives and are broadly popular with the public.
The issue was always, could Democrats get something on the floor?
And the
answer to that is now clearly yes, Mr. Wamhoff said. Biden did win
after campaigning on raising taxes on corporations and raising taxes on the
rich.
Even so, Democrats face a series of tough challenges to turn those
proposals into law with narrow legislative margins, a weak economy and a
still-raging pandemic. The results might look quite different from the
campaign-trail outlines, and the slim majorities may yield less than the $3
trillion in tax increases that Mr. Biden sought.
The Senate will be divided 50-50, and Democrats will have Kamala Harris
breaking ties as vice
president. That means they can't lose a single vote, pushing them to look
for policies that unite progressives eager to address income inequality and
moderates worried about the effects of tax increases on the economic
recovery. The same dynamic holds in the House, where Democrats have a slim
margin.
One vote is a pretty narrow majority, said Mark Mazur, a
former Obama administration official who is now director of the Tax Policy Center, a
Washington research group. It's going to be a matter of persuading people.
But at least you have a chance.
Mr. Biden has said repeatedly and reiterated Wednesday that
he wants to
work with Republicans. But unlike other policy areas, tax changes can pass
with a simple majority of senators, instead of the 60-vote majority often
needed for most other legislation. Democrats will face pressure from their
base to deliver.
The likely result: Up to $2 trillion worth of tax increases
over the next decade, says Donald Schneider, an economist and former House
Republican aide at advisory firm Cornerstone Macro. That is shy of what Mr.
Biden proposed but still a significant bump in federal revenue to pay for
new programs and targeted tax cuts and far beyond what could happen if
Republicans had held the Senate.
It makes an enormous difference, said Republican economist Douglas
Holtz-Eakin, a former director of the Congressional Budget Office.
Democrats may attempt to mesh these longer-term plans with their efforts to
provide tax cuts and other economic relief during the coronavirus pandemic.
Sen. Chuck Schumer (D., N.Y.), who is poised to be majority leader, said
Wednesday that one of the party=E2=80=99s first moves would be to authorize
the
$2,000 stimulus payments that were blocked in the waning days of last year.
During the presidential campaign, Mr. Biden proposed more than $3 trillion
of tax increases over a decade to raise revenue to pay for some of his
spending plans, according to the Tax Policy Center. That includes
initiatives on the environment and health care.
For corporations, he would raise the tax rate to 28% from 21%, impose a
minimum tax on companies with lower effective tax rates and increase taxes
on U.S. companies foreign earnings.
Households making more than $400,000 would see their tax rates go up under
the Biden plan, and he would raise the top rate to 39.6% from 37%. He would
also limit deductions and raise payroll taxes for that group, though his
proposed payroll-tax changes may not qualify for the fast-track rules to
avoid a Senate filibuster.
He would also change how assets are taxed at death. Currently, people who
die with unrealized gains don't have to pay capital-gains taxes, and their
heirs only have to pay on gains after the original owner's death. Mr. Biden
would apply capital-gains taxes to those increased asset values at death.
The highest-income households would pay capital-gains rates roughly equal
to those for ordinary income.
Sen. Ron Wyden (D., Ore.), the likely Finance Committee chairman, has a
different approach to the same issue,
calling for annual taxes on
unrealized gains. Democrats may end up going with a more modest
capital-gains tax rate increase instead, Mr. Schneider said.
Mr. Biden also proposed some targeted tax cuts. Notably, he called for
expanding the child tax credit to $3,000 from $2,000, adding $600 for young
children and making those payments monthly instead of once a year in tax
refunds. He also proposed tax credits for caregivers, renters and
first-time home buyers.
House and Senate Democrats also back those child tax credit expansions.
And Rep. Richard Neal (D., Mass.), chairman of the House Ways and Means
Committee, has been preparing to advance infrastructure legislation and
changes to encourage retirement savings, both areas that could be
bipartisan but could also move as part of Democrats efforts.
Democrats may also try to cut some taxes for high-income constituents by
repealing the $10,000 limit on state and local tax deductions. That is
important to Mr. Schumer and lawmakers from high-tax states such as New
York and New Jersey. But other Democrats, including progressives and those
from states without income taxes, may object.
Democrats will have to choose which tax policies to pursue first. They will
grapple with the complicated design questions to put details to the
campaign rhetoric. They will have to figure out when any
new taxes should
take effect retroactively for this year or prospectively as the economy
recovers.
They will do all of this amid a global pandemic in a situation where any
member's absence or illness can change the balance of power.
In both houses of Congress, it's going to be so tight as to defy
description, and everything has the chance to fall apart, Mr. Holtz-Eakin
said.
Democrats likely won't wait until the economy is on surer footing to pass
their tax increases, though they may delay the start dates of those
policies until 2022, Mr. Schneider said.
You have an opportunity to legislate, he said. You're going to do it.
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