April 22 (Reuters) – President Joe Biden is expected to announce a sweeping “American Families” proposal next week to invest in government-funded childcare, universal pre-kindergarten education, and paid leave for workers – and make the wealthiest Americans pick up the tab.
Here is a summary of how it might work, based on sources familiar with the plan and details from Biden’s campaign proposals on which the plan is built.
WHAT AMERICANS WOULD GET
Universal pre-kindergarten: Biden said on the campaign trail that he would provide federally funded universal pre-kindergarten for all 3- and 4-year-old children.
Paid family leave: Biden supports legislation that will provide 12 weeks of paid leave for all workers for their own or a family member’s serious health condition.
Free community college: Biden supported providing two years of community college or other high-quality training program debt-free for individuals looking to learn or improve their skills to keep up with the changing nature of work.
Extended child tax credits: Biden is seeking to extend the expanded child tax credit — which is essentially a monthly payment from the government for most families — through 2025. The credit was created on a temporary basis by the $1.9 trillion coronavirus relief package passed in March.
HOW THE RICHEST AMERICANS WOULD PAY FOR IT
Top marginal tax: Biden will propose raising the top marginal income tax rate to 39.6% from 37%. For tax year 2021, the top tax rate is 37% for the richest Americans – individual taxpayers with incomes greater than $523,600 and married couples filing jointly of over $628,300.
Capital gains: Biden would nearly double taxes on capital gains, or income earned from the sale of an asset like a stock, to 39.6% for people earning more than $1 million. On the campaign trail, Biden proposed taxing capital gains and dividends as ordinary income for taxpayers earning over $1 million.
Inheritance: Biden could eliminate a provision of the tax code that reduces taxes for wealthy heirs who sell assets they inherit that have gained value over time.
Enforcement: Raise revenue by increasing enforcement at the Internal Revenue Service to bring in more money from wealthy Americans who evade taxes. (Reporting by Jarrett Renshaw; Editing by Heather Timmons and Peter Cooney)
