President Biden is pushing hard for higher taxes on the wealthy, to pay for his climate plans, infrastructure, child care benefits and a variety of social-welfare programs. Just one problem: Biden and his fellow Democrats would be raising taxes on their own constituents more than any other political group. That suggests Democrats in Congress will end up voting for considerably smaller tax hikes than Biden is calling for.
Biden wants to raise the top income tax rate from 37% to 39.6%, which would affect taxpayers with incomes starting at around $530,000. He’d nearly double the capital gains tax for people who earn more than $1 million and raise the inheritance tax above $3.5 million in holdings. That’s in addition to a planned increase in the corporate tax rate and other tax hikes Biden may yet announce as part of the “American Family Plan,” his package of social-welfare reforms that’s coming soon.
Those tax hikes would hammer Democrats in blue states more than the Republicans in red ones. Of the 50 wealthiest Congressional districts, Democrats represent 42 of them, according to Census Bureau data. Republicans hold just 8. For the last 25 years, shifts in party affiliation have brought more wealthy urbanites to the Democratic party, and more working-class whites to the GOP. Republicans used to be the party of business, but even that seems to be changing as the GOP radicalizes and some businesses keep their distance.