As Biden said, he’d raise taxes on the wealthy. President Biden shared yesterday that to avert a Medicare funding crisis, his proposed 2024 budget includes an increase to the net investment income tax from 3.8 percent to 5 percent for all Americans earning more than $400,000 a year. The tax would apply to capital gains and investment income and be expanded to apply to other income from pass-through firms. The budget plan, separately, might also include a proposal to levy a 20 percent minimum income tax on multimillionaires and billionaires.
And interest rates may climb even more. Federal Reserve Secretary Jerome Powell, in testimony before the Senate Banking Committee, said that the bank would “be prepared to increase the pace of rate hikes” if the latest economic data continue to come in stronger than expected. Cooling in the economy, he said, appears to have “partly reversed.”
Later today in the Senate. The chamber may hold a procedural vote today to end debate on the confirmation of Daniel Werfel to be the next IRS Commissioner. Senate Finance Committee Chair Ron Wyden (D) hopes that the final confirmation vote will take place tomorrow.
Also from the Senate, a bipartisan bill for a neighborhood revitalization tax credit. Finance panel members Sens. Ben Cardin (D) and Todd Young (R) introduced legislation to create a federal tax credit that covers the cost between building or renovating a home in economically distressed urban and rural areas and the price at which they can be sold. The legislation also caps the sales price for each home to ensure affordability.
Signed in Michigan: $1 billion in tax relief. Gov. Gretchen Whitmer (D) signed legislation overhauling the state’s tax system. The package of bills restores tax exemptions for pensioners and expands the state’s Earned Income Tax Credit (EITC) from 6 percent to 30 percent of the federal EITC. Senate Republicans voted against making the changes immediately effective to preserve a potential permanent income tax rate reduction, contingent on the status of the state’s budget surplus. The new changes will go into effect in tax year 2023.
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