President Joe Biden is set to unveil a sweeping new “families” proposal during his joint session address Wednesday night, the third such landmark spending proposal of his first 100 days in office.
The “American Families Plan,” senior administration officials say, will cost an estimated $1.8 trillion and comes on the heels of the not-yet-introduced-to-Congress “American Jobs Plan” ($2.25 trillion) and the “American Rescue Plan” ($1.9 trillion) that the president signed into law in March.
Like the AJP, the AFP will also primarily be paid for with tax increases on the wealthiest Americans, with the latest proposal featuring five specific rate changes and loophole closures for the country’s wealthiest households.
- Re-raising the highest income tax bracket to pre-2017 levels (39.6%)
- Raise the capital gains tax for filers making more than $1 million a year to match the income tax rate (39.6%)
- Close the carried interest loophole for hedge fund partners, the special real estate break allowing investors to defer taxes on transfers larger than $500,000, and extend the current restrictions governing excess business losses
- Consistently enforce all filers in the top income bracket pay the same Medicare taxes.
Biden is also proposing an increase in funding and manpower for the Internal Revenue Services and a reallocation of priorities so that the agency focuses its audit efforts on the wealthiest Americans who may be taking advantage of the spirit of the law or fraudulently filing their returns. (RELATED: Biden Seems To Yet Again Ignore Bipartisan Compromise To Join The Left On Infrastructure)
Biden’s plan is expected to exclude, however, an expansion of the estate tax, something he promised to do throughout the 2020 campaign.
The proposal also extends and expands several family-focused programs that allegedly help lower and middle-class earners, including:
- Additionally expand the Affordable Care Act tax credits included in the ARP
- Extend the Child Tax Credit increases in the ARP Rescue Plan through 2025 and make the Child Tax Credit permanently fully refundable
- Permanently increase tax credits to support families with child care needs
- Make the Earned Income Tax Credit Expansion for childless workers permanent
- Give IRS the authority to regulate paid tax preparers
The plan itself will provide aid directly to families in the form of:
- Universal free Pre-K schooling, regardless of family income (Upwards of $200 billion)
- Universal free community college, regardless of family income (Upwards of $100 billion)
- Expansion of Pell Grants to help low-income students pay for college ($85 billion)
- A National paid family and emergency leave program ($225 billion)
- Combat nutritional problems by investing in larger school lunch programs, launching “healthy foods” incentives, and expanding the Supplemental Nutrition Assistance Program (SNAP) ($45 billion)
White House officials conceded the proposal faces an uphill climb in Congress but framed the spending — along with the AJP — as necessary spending to allow the U.S. to compete with China throughout the 21st century.
This is a developing story and will be updated with more information as it becomes available.