WASHINGTON — House Democrats expect to propose raising the corporate tax rate to 26.5% from 21% and imposing a 3 percentage-point surtax on individual income above $5 million, according to a House Democratic aide familiar with the plans.The tax increases would be part of the House Ways and Means Committee’s plans to pay for the party’s priorities in a fast-moving budget bill. Those items include an expanded child tax credit, a national paid-leave program and renewable-energy tax breaks.
House Democrats also are considering raising the minimum tax on U.S. companies’ foreign income to 16.5% from 10.5% and increasing the top capital-gains tax rate to 28.8% from 23.8%. Lawmakers are also expected to raise money by expanding Internal Revenue Service enforcement and may include other tax increases on corporations and high-income individuals. Until now, House Democrats have been coy about their tax increase plans as they try to navigate between moderates worried about the economic impact of raising taxes and progressives eager to tax the rich and expand the social safety net. Rep. Richard Neal, D-Mass., the committee chairman, has said that detailing tax-increase plans too soon can give too much time for opposition to build. The plans, aimed for a Ways and Means Committee vote later this week, will face challenges as Democrats try to determine how far they are willing to go in reversing the 2017 tax cuts and imposing stiffer burdens on corporations and high-income households. An expanded version of this report appears on WSJ.com. Also popular on WSJ.com: Everything must go! The American car dealership is for sale. Snowbirds are heading to Florida and Arizona despite the delta variant.