{"id":754704,"date":"2021-09-15T10:06:19","date_gmt":"2021-09-15T14:06:19","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=754704"},"modified":"2021-09-15T10:06:27","modified_gmt":"2021-09-15T14:06:27","slug":"how-the-democrats-new-tax-hike-will-impact-your-wallet","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/how-the-democrats-new-tax-hike-will-impact-your-wallet\/","title":{"rendered":"How The Democrats\u2019 New Tax Hike Will Impact Your Wallet"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fhow-the-democrats-new-tax-hike-will-impact-your-wallet%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=754704&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/09\/GettyImages-1235123607-scaled-1.jpg?w=1200&amp;h=800&amp;ixlib=react-9.0.3\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span>Democrats on the House Ways and Means Committee \u2014 which plays a key role in determining tax policy and other fiscal measures \u2014 are drafting a proposal to raise $2.9 trillion in new taxes.<\/span><\/p>\n<p><span>The proposed tax <\/span><a href=\"https:\/\/waysandmeans.house.gov\/sites\/democrats.waysandmeans.house.gov\/files\/documents\/SubtitleISxS.pdf\"><span>hikes<\/span><\/a><span> \u2014 which would occur over the course of ten years \u2014 were introduced by Ways and Means Committee Chairman Richard Neal (D-MA) as Congressional Democrats attempt to pass a separate $3.5 trillion social welfare agenda without any support from Republican colleagues. The <\/span><a href=\"https:\/\/www.dailywire.com\/news\/senate-advances-3-5-trillion-budget-resolution-with-no-republican-support\"><span>outline<\/span><\/a><span> of the omnibus legislation \u2014 which incorporates key elements of the <\/span><a href=\"https:\/\/www.dailywire.com\/news\/nonpartisan-economists-say-bidens-infrastructure-plan-will-decrease-economic-growth\"><span>American Jobs Plan<\/span><\/a><span> and <\/span><a href=\"https:\/\/www.dailywire.com\/news\/bidens-american-families-plan-is-far-from-a-new-deal-economic-boon\"><span>American Families Plan<\/span><\/a><span> \u2014 includes universal pre-K, \u2018tuition-free\u2019 community college, a paid family and medical leave handout, additional health benefits for Medicare, and a \u201cCivilian Climate Corps.\u201d<\/span><\/p>\n<p><span>The Democrats\u2019 bill would follow President Biden\u2019s $1.9 trillion <\/span><a href=\"https:\/\/www.dailywire.com\/news\/comparing-trump-and-bidens-covid-relief-bills\"><span>American Rescue Plan<\/span><\/a><span>, which intended to stimulate economic activity following COVID-19 and the lockdown-induced recession.<\/span><\/p>\n<p><span>Indeed, the Democrats\u2019 tax hikes mark another milestone in codifying President Biden\u2019s domestic spending agenda. Although Rep. Neal\u2019s proposal did not perfectly <\/span><a href=\"https:\/\/www.wsj.com\/articles\/democrats-release-details-of-tax-increase-11631539532\"><span>match<\/span><\/a><span> the Commander-in-Chief\u2019s preferred tax rates in some instances, the possible changes to the tax code match the overall framework of President Biden\u2019s campaign <\/span><a href=\"https:\/\/joebiden.com\/two-tax-policies\/\"><span>platform<\/span><\/a><span> \u2014 which blasted President Trump for allegedly rewarding \u201cwealth over work\u201d and called for rollbacks of many key provisions in the Tax Cuts and Jobs Act of 2017.<\/span><\/p>\n<p><span>Here\u2019s what you need to know about the Democrats\u2019 new tax increases \u2014 and how they may end up lightening your wallet.<\/span><\/p>\n<p><b>Tax Increases<\/b><\/p>\n<p><span>The proposal suggests raising the income tax, the corporate tax, and the investment tax, as well as introducing an additional surtax on wealthy Americans.<\/span><\/p>\n<p><span><i><span>Income Taxes<\/span><\/i><\/span><\/p>\n<p><span>The policy would increase the top marginal individual income tax rate from 37% to 39.6%, reversing the cut enacted by Republicans four years ago.<\/span><\/p>\n<p><span>Married couples filing jointly with taxable income over $450,000; heads of households with taxable income over $425,000; unmarried individuals with taxable income over $400,000; and married individuals filing separately with taxable income over $225,000; and estates with taxable income over $12,500 would all be subject to the new benchmark.<\/span><\/p>\n<p><span>The proposal is in line with the Biden administration\u2019s desired 39.6% top income tax rate.<\/span><\/p>\n<p><span><i><span>Corporate Taxes<\/span><\/i><\/span><\/p>\n<p><span>After Republicans decreased the corporate tax from 35% to 21%, Democrats want to introduce a graduated rate structure that would cut into the profits of medium and large corporations.<\/span><\/p>\n<p><span>A corporation\u2019s first $400,000 of income would be taxed at 18%. Income up to $5 million would then be taxed at 21%, and any additional earnings would be subject to a 26.5% tax.&nbsp;<\/span><\/p>\n<p><span>President Biden, however, prefers a slightly higher 28% corporate tax rate.<\/span><\/p>\n<p><span><i><span>Capital Gains Taxes<\/span><\/i><\/span><\/p>\n<p><span>The long-term capital gains tax \u2014 which applies to appreciated investments sold after at least one year of ownership \u2014 for those earning above $500,000 would increase from 20% to 25%. Combined with the existing 3.8% surtax, the total tax would rise to 28.8%.<\/span><\/p>\n<p><span>The Biden administration has previously suggested a significantly higher 39.6% tax on long-term capital gains and dividends.<\/span><\/p>\n<p><span><i><span>Estate Taxes<\/span><\/i><\/span><\/p>\n<p><span>The tax proposal also includes a 3% surcharge on adjusted gross income above $5 million for high-income earners, estates, and trusts. The change marks a significant reduction from the current $11.7 million estate tax exemption, which was enacted under the Trump administration.<\/span><\/p>\n<p><b>Other Changes<\/b><\/p>\n<p><span>Beyond increases to the most important revenue generators for the federal government, the proposal involves several extraneous changes to American tax policy \u2014 including a boost in enforcement funding, new taxes for niche products, and handouts for various special interests.<\/span><\/p>\n<p><span><i><span>IRS Enforcement<\/span><\/i><\/span><\/p>\n<p><span>The policy would allocate nearly $79 billion to the Internal Revenue Service for \u201cenforcement activities and increasing voluntary compliance, and modernizing information technology to effectively support enforcement activities.\u201d The Biden administration first floated the idea earlier this year as a tool to crack down on tax evasion and raise an additional $700 billion for the federal government.&nbsp;<\/span><\/p>\n<p><span>The proposal also clarifies that \u201cno use of these funds is intended to increase taxes on any taxpayer with taxable income below $400,000.\u201d<\/span><\/p>\n<p><span><em><span>Forced Retirement Account Distributions<\/span><\/em><\/span><\/p>\n<p><span>Among the changes to Americans\u2019 retirement accounts is a \u201cminimum distribution\u201d for high-income individuals.<\/span><\/p>\n<p><span>Americans who earn over $450,000 in a joint return and hold traditional IRAs or Roth IRAs with balances above $10 million will have to distribute 50% of the \u201camount by which the individual\u2019s prior year aggregate traditional IRA, Roth IRA and defined contribution account balance exceeds the $10 million limit.\u201d Accounts with balances above $20 million will be subject to a 100% minimum distribution rule.<\/span><\/p>\n<p><span><i><span>More Taxes On Tobacco<\/span><\/i><\/span><\/p>\n<p><span>The Democrats\u2019 tax plan would also double the existing excise tax on popular tobacco products \u2014 including cigarettes and small cigars \u2014 from $50.33 per thousand to $100.66 per thousand.<\/span><\/p>\n<p><span>Meanwhile, the provision \u201cchanges the tax on large cigars from an ad valorem basis to a weight basis at the rate of $49.56 per pound, but not less than 10.06 cents per cigar,\u201d while also increasing taxes for smokeless tobacco \u2014 such as chewing tobacco, pipe tobacco, and snuff.<\/span><\/p>\n<p><span>The policy would also tax all nicotine products to match the new rate for cigarettes.<\/span><\/p>\n<p><span><em><span>Tax Credits For Journalists<\/span><\/em><\/span><\/p>\n<p><span>Among the groups that stand to gain from the new tax policy are \u201clocal news journalists.\u201d<\/span><\/p>\n<p><span>The provision creates an \u201cemployment tax credit for each calendar quarter wages, not to exceed $12,500, paid to local news journalists by an eligible local newspaper publisher.\u201d An \u201celigible local newspaper publisher is any employer that is in the trade or business of publishing a local newspaper that serves the needs of a regional or local community and who employs no more than 750 employees.\u201d<\/span><\/p>\n<p><i><span>The views expressed in this opinion piece are the author\u2019s own and do not necessarily represent those of The Daily Wire.<\/span><\/i><\/p>\n<p><i><span>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a <\/span><\/i><a href=\"https:\/\/www.dailywire.com\/subscribe\"><i><span>member<\/span><\/i><\/a><i><span>.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Democrats on the House Ways and Means Committee \u2014 which plays a key role in determining tax policy and other fiscal measures \u2014 are drafting a proposal to raise $2.9 &#8230;<\/p>\n","protected":false},"author":1,"featured_media":2315279,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-754704","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/754704","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=754704"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/754704\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=754704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=754704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=754704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}