Hello and happy Monday, and welcome back to On The Money. I’m Niv Elis, filling in for Sylvan Lane, with your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL: Lawmakers are bracing for a bitter fight over tax increases President Biden is expected to propose in the coming days, which he says are necessary to pay for trillions in infrastructure and family support bills.
Biden’s proposals, which largely hew to his campaign promises, would raise the corporate tax rate from 21 percent to 28 percent, implement a minimum corporate tax, nearly double taxes on investment gains for the wealthiest and tweak inheritance laws.
The announced plans for corporate taxes would cover the $2.3 trillion infrastructure plan dealing with transport, broadband, water and electricity. Capital gains and other proposals are being finalized ahead of next week’s rollout of a so-called family infrastructure plan focusing on early education and home care that could run as high as $1.5 trillion.
Republicans, whose signature achievement under the Trump administration was a 2017 tax reform that cut taxes significantly, have excoriated the proposals.
Read more about the competing priorities from Left, Right, and Center on the proposal here.
How it’s playing out:
- The White House is defending President Biden’s forthcoming proposal, saying the capital gains change will only impact a small fraction of taxpayers and make the tax code more fair.
- Just 3 out of every 1,000 taxpayers would be affected. More from Morgan Chalfant and Naomi Jagoda here.
- The Hill’s Niall Stanage notes that Biden is trying to flip the script on taxes, and polls show it’s resonating. Read his take in The Memo.
LEADING THE DAY: Republicans say fiscal conservatism simply isn’t the GOP rallying cry it used to be, and that’s making it much harder to counter President Biden’s push for trillions of dollars in new government spending.
Instead, culture war issues like immigration, religious freedom, LGBTQ rights, Big Tech and the Black Lives Matter movement are taking center stage in conservative politics.
The initial shift in Republican political priorities away from belt-tightening coincided with the demise of the Tea Party, the dominant force in the 2010 midterm elections, and the rise of now-former President Trump, who presided over an $8 trillion increase in the national debt.
Now, Republicans are having a tough time generating the same outrage over Biden’s multi trillion-dollar spending agenda as they did over former President Obama’s signature initiatives: the American Relief and Reinvestment Act and the Affordable Care Act, which cost far less than what Biden is proposing on infrastructure.
Read more from Alex Bolton here.
Economic confidence hits net positive for first time in pandemic: A Gallup ranking of economic confidence turned positive in April for the first time since the pandemic wreaked havoc on the economy last March.
The Economic Confidence Index for the month, based on survey data asking Americans their views of the current economic situation and their expectations for where the economy is headed, clocked in at 2, up from minus 21 in January and minus 33 in the immediate aftermath of the initial recession.
Prior to the pandemic, the index stood at 41.
I’ve got more details here.
GOOD TO KNOW
- Apple announces $430 billion investment in US, 20K new jobs
- Biden expected to announce updated mask guidance on Tuesday
- EU official: Vaccinated Americans can visit Europe this summer
ON TAP FOR TOMORROW:
- The Senate Finance Committee holds a hearing on fighting climate change and spurring green energy development through the tax code at 10 a.m.
- A Senate Commerce subcommittee holds a hearing on COVID-19-related scams at 10 a.m.
- The House Financial Services Committee holds a Member Day hearing at 12 p.m.
- A Senate Finance subcommittee holds a hearing on creating opportunity through a fairer tax system at 2:30 p.m.
OPINION