President Joe Biden is expected to propose new taxes on the rich to pay for the next phase in his rescue package, two sources familiar with the plan told NBC News on Thursday.
The president will lay out the full proposal, which he calls the American Families Plan, during his address to a joint session of Congress next week. The plan has a price tag of roughly $1.5 trillion, according to two sources familiar with the discussions. The proposal is focused on expanding child care, paid leave, universal pre-K education, free community college, and other domestic priorities.
The proposal would also extend the child tax credit through 2025 but not make it permanent. Democrats’ $1.9 trillion Covid-19 relief package, which Biden signed into law in March, raised the credit to as much as $3,600 per child per year.
The Washington Post reported the plan on Monday.
Administration officials are reviewing ways to offset the cost of the package. The White House is considering raising the top marginal income tax rate to 39.6 percent from 37 percent, which was the rate in President Trump’s tax overhaul in 2017. Capital gains could also be taxed as regular income to pay for the legislation, according to a source familiar with the proposal.
White House press secretary Jen Psaki said Thursday that she wouldn’t get ahead of the president’s final announcement, and that details are still being worked out.
“We’re still finalizing what the pay-for looks like,” she added. She reiterated the president’s pledge not to raise taxes on any American making less than $400,000 a year.
Biden’s plan follows the first phase of his $2.3 trillion “American Jobs Plan,” which is aimed at revitalizing physical infrastructure like roads, bridges, airports, waterways, and broadband. That proposed package would be funded by tax increases on corporations.
Administration officials reportedly decided to remove a $700 billion health care expansion from the proposal for political reasons, deciding instead to pursue health care as a separate initiative, according to the New York Times.