LIVE: Inside Biden’s Tax Plan to Reshape Wealth in America | Top News

(Apr. 29) If the Biden administration were a television show, an apt title might be “Trillions.” The word just keeps coming up. There was that $1.9 trillion for a pandemic relief package. Another $2.25 trillion for an infrastructure plan. And on Wednesday, the president announced a $1.8 trillion proposal that would dramatically reshape wealth — from the way government benefits work to how taxes are levied — in America.

“What I’ve proposed is fair. It’s fiscally responsible,” he said in his speech.

The administration pitches the latest plan as a way to support American families, particularly in the middle class. If you fall into this category, what might you get? Here’s a look:

-Child tax credit: Extends through 2025 a $3,600 credit for children under age 6 and $3,000 for those 6 and older

-Child care: $225 billion to help low-income families pay for child care, as well as a permanent tax credit for child care costs worth up to $4,000 for one child 12 and under, and $8,000 for multiple children

-(Some) free college: Two years tuition-free at community colleges, and an $85 billion investment in Pell Grants, which help students going to four-year schools

-Free pre-school: Know any 3- and 4-year olds? They’d go to pre-school free of charge.

-About $50 a month in savings for health insurance: Expands tax credits for households that buy their own health insurance

-Paid leave: A $225 billion national paid family and medical leave program would give workers partial wage replacement — up to $4,000 a month — to take time off for a range of issues, such as caring for a newborn or sick family member, recovering from an illness, or managing the death of a relative. We all know, though, that there is no such thing as a free lunch. The plan — here we go with our “Trillions” TV-show theme again — comes with $1.5 trillion of tax increases on the wealthiest Americans. Here’s what those would look like:

-Income tax increase: The tax rate would go up to 39.6% on the highest 1% of earners.

-Capital gains tax increase: People earning $1 million or more would pay the same rate for capital gains as for income — to 39.6% from 20%.

-More audits: A beefed-up IRS enforcement arm, enough to claw back just a portion of the estimated $1 trillion in tax evasion every year

-Fewer tax breaks: Private-equity and hedge-fund managers would lose a benefit called “carried interest” that helps them lower their tax bills. Property investors would also lose the ability to defer certain tax payments on capital gains of over $500,000.

Now the big question is: How likely is it that all this happens?

The proposals still face major hurdles in Congress. Both Biden’s ambitious infrastructure and families proposals will face resistance from Republicans set against higher taxes and additional spending on child care and paid leave, as well as some Democrats. Moderates criticized the size of the packages and the tax increases, while progressive lawmakers are rallying to include measures important to them, like lower prescription drug prices or cancelling student debt.

Biden remains far from reaching a consensus with Republicans in Congress. (Senate Minority Leader Mitch McConnell called Biden’s latest proposal a “liberal wish list.”) Alternatively, if Biden can lock in the full support of Democrats, he could pass part of the plan through the fast-track process known as budget reconciliation, which bypasses the Senate filibuster.

It’s unclear whether lawmakers will consider Biden’s two plans together or separately — or whether Democrats will try to push it through without Republican support, as they did with the Covid rescue bill.

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