Higher taxes for the rich edged closer to reality on Wednesday morning, after Senate Democrats passed a $3.5 trillion budget plan along party lines.
The blueprint would raise taxes on wealthy Americans and corporations and beef up tax enforcement to fund additional spending on education, paid leave, childcare, health care and climate initiatives, according to a framework issued Monday.
That outline offers scant detail on specific tax policy relative to the wealthy, saying only that it seeks “tax fairness for high-income individuals.”
But it’s likely the richest Americans will face higher taxes on their ordinary income, capital gains from investments and appreciated assets bequeathed to heirs, according to tax experts.
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The plan would also “prohibit” new taxes on families making less than $400,000 a year, small businesses and family farms.
At the same time, the spending plan — which paves the way for formal legislation that Democrats can pass without Republican votes — may also give a tax break to some wealthy individuals in high-tax states. It suggests Democrats will offer “relief” on the current $10,000 cap on state and local tax deductions.
Of course, placating all Democrats, who have razor-thin margins in the Senate and House, may prove tough relative to tax policy and could complicate their agenda.
