Some Democrats have called for higher taxes on Wall Street profits

Senator Chuck Grassley, Republican from Iowa and ranking member of the Senate Budget Committee, during a hearing in Washington, DC, on Tuesday, March 12, 2024.

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As Congress grapples with an impending decision on the Trillions of tax breaks are about to expirelawmakers and experts in a Senate Budget Committee hearing debated several Democratic proposals to raise taxes on corporations and wealthy Americans.

Supporters say the plans aim to tackle income inequality and federal budget deficit.

Some of the debates include scrutiny of corporate tax rates, buy back sharescapital gains tax rates and taxes on profits for private equity and hedge fund managers, known as real interest rate. They also discussed taxes on unrealized profits or profits on unsold assets, among other proposals.

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Higher taxes on corporations and the wealthy would “create a fairer tax system, generate more revenue and spur growth,” said Joseph Stiglitz, an economics professor at Columbia University. ”.

However, many of these proposals, such as reforms to attract benefits, have not received widespread support even within the Democratic party, said Sen. Chuck Grassley, R-Iowa.

Although interest rate reform was initially included in the Inflation Reduction Act, those changes were removed before the bill passed the Senate.

Sen. Mitt Romney, R-Utah, said most of the proposed tax increases discussed during the hearing would have “unforeseen consequences” on the economy.

The debate over the expiration of tax breaks

Chairperson Joe Biden also called Higher taxes to the wealthy and corporations, saying the taxes would help pay for an extension of an expiring tax break for taxpayers with incomes under $400,000.

The Tax Cuts and Jobs Act of 2017, or TCJA, was enacted by the former President Donald Trumpinclude lower federal income frameworkIncrease the standard deduction and double it ONE Exempt from estate and gift taxesalong with other regulations.

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Without action from Congress, more than 60% According to the Tax Foundation, a higher number of filers will have to pay taxes after 2025 when the provisions of the TCJA expire.

However, extending all expiring provisions would be costly and could add to estimated costs. Deficit of 4.6 trillion USD over the next decade, the Congressional Budget Office reported in May.

Although Trump did not reveal many tax policy proposals during his presidential campaign, he did express interest in fully extending the expiring TCJA provisions.

Of course, the future of this law ultimately depends on which party controls Congress and the White House.

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