President Joe Biden's top economic advisor pledged Democrats would push to reverse Donald Trump's corporate tax cuts next year, setting up a battle with Republicans over a tax law with provisions slated to expire at the end of 2025.
"It's clear we need to end the 2017 tax breaks for the ultra-wealthy and scale back costly permanent corporate tax breaks," White House National Economic Council Director Lael Brainard said Friday during a speech in Washington. "Our tax system currently asks much less of corporations than it used to."
Policymakers are bracing for a major tax negotiation next year, no matter the outcome of November's presidential and congressional elections. Biden has proposed raising the federal corporate tax rate to 28%, up from the 21% in Trump's tax law but lower than the previous level of 35%.
Individual tax cuts are set to expire at the end of 2025, meaning that taxpayers at all income levels would face a levy increase unless Congress acts. Also expiring are restrictions on the estate tax and a deduction for business owners, which have been criticized for skewing tax benefits to high-earners.
"Any outcome that does not preserve the current tax breaks for the middle class is one that the president wouldn't be able to accept," Brainard said at the Brookings Institution.
Biden has pledged to not raise taxes on any household making less than $400,000 a year. Brainard said Biden supports renewing the tax cuts for those earning under that threshold, and will offset that costs with more taxes on the wealthy and businesses.
"At minimum, we should avoid making the fiscal hole created by Republican tax cuts deeper," Brainard said. "We should use the 2025 tax debate as an opportunity to raise revenue overall."
