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Dems propose tax hikes for the rich, corporations to pay for $3.5T spending plan

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Dems propose tax hikes for the rich, corporations to pay for $3.5T spending plan
The U.S. Capitol is seen in Washington, D.C., on August 24. The Senate returned to Capitol Hill on Monday and the House is scheduled to return September 20. Photo by Ken Cedeno/UPI | License Photo

Sept. 13 (UPI) -- House Democrats unveiled a proposal on Monday to increase a variety of taxes on U.S. corporations and the wealthiest Americans to help pay for a $3.5 trillion congressional spending plan that earmarks billions for things like social programs and climate initiatives.

The budget resolution was passed last month by the Senate and is being evaluated by the House.

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Monday, the House ways and means committee outlined a proposal designed to cover much of the spending package. Part of the proposal calls for hikes to the corporate tax rate, top capital gains rate and individual tax rate.

Many Democrats in the chamber have pushed the spending package as a companion piece to the bipartisan $1 trillion infrastructure bill, which was also passed by the Senate and has stalled in the House.

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The expensive spending plan, which has no support from any Republicans, aims to fund a list of Democratic priorities like expanding Medicare, free community college, universal childcare for working families and legal permanent resident status for qualified immigrants.

Monday's tax proposal would increase the corporate tax rate from 21% to 26.5%. The top capital gains rate would grow from 20% to 25%, the top individual tax rate would increase from 37% to 39.6% and there would be a 3% surtax on individuals making more than $5 million per year.

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"Our proposals allow us to both address our perilously changing climate and create new, good jobs, all while strengthening the economy and reinvigorating local communities," committee Chair Rep. Richard Neal, D-Mass., said in a statement.

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"We seek to help families better afford essentials with the continuation of the expanded Child Tax Credit and investments that will lower the cost of prescriptions and health insurance premiums. And we can do all this while responsibly funding our plans."

The committee's proposal does not estimate how much revenue would be generated from the increased taxes, or say whether they would be enough to cover the cost of the entire plan.

"Taken together, these proposals expand opportunity for the American people and support our efforts to build a healthier, more prosperous future for the country," Neal added.

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The House Republican caucus criticized the proposal.

"The cost of living is skyrocketing for American families. What are House Democrats doing about it? They are attempting to pass 'the biggest tax increase in decades,'" the caucus tweeted.

The tax proposals could change in the coming weeks when the House returns to session and lawmakers unveil a final bill for a full floor vote. Some moderate Democrats have balked at the cost of the spending plan and Democrats' narrow majorities in both chambers could ultimately require a compromise.

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The Senate returned to Capitol Hill on Monday following its August recess, and the House is scheduled to return on Sept. 20.

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