July 13, 2022 - Douglas Myser

Democrats to raise taxes on high earners. Senate Democrats have reached an agreement to increase the tax rates on high income wage earners. They believe these individuals have been misusing or in some cases abusing a loophole in the tax law to avoid paying taxes. The lawmakers in the Senate plan to close the loophole for those who are earning more than $400,000 a year, and make them pay 3.8% additional tax on income from pass through businesses, in what is in essence a slimmed down tax bill, after the Build Back Better Act stalled, due to two Senators refusal to go along with it. Democrats to raise taxes on high earners.

They believe that the increased tax rate on those earning over $400,000 a year, will increase IRS and Treasury Department Revenue by nearly $200 billion over the next 10 years and the money is going to be used to pay for keeping Medicare solvent through 2031, trying to keep the federal health care program from a bankruptcy. Without action by the Congress, the program known as Medicare and its Trust fund would begin running out of money by 2028. Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va., have been privately negotiating a bill that would include prescription drug savings--which they've reached an agreement on--as well as energy and climate funding and tax increases. They haven't struck a deal on the package and it's unclear if they will.

The tax proposal will be submitted in the coming days to a Senate official to ensure it complies with the complicated rules of a special budget process which would allow Democrats to pass it with a simple majority.

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