The Democratic Push To Tax The Rich More Is 40 Years In The Making

If Congress manages to pass President Biden's big budget package this fall with most of its spending and tax changes intact, it will represent the biggest shift in federal fiscal policy in 40 years.

If it happens — still a big if — it will be because Congress can circumvent its usual rules and process tax-and-spending measures via a process called reconciliation. That process is a powerhouse capable of major disruptions and changes in government because it offers protection from filibuster. Reconciliation bills can pass with a simple majority.

That is why Biden and his allies, House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer, think they have a shot at raising trillions in tax revenue over the next 10 years to pay for their spending priorities. Democrats propose to raise the needed revenue through borrowing as well as through more robust revenue collections thanks to a beefed-up IRS.

But the bulk of it would come from tougher tax treatment and higher tax rates on corporations, investors and others whose annual income exceeds $400,000.

If they succeed, they will be using reconciliation to reverse the direction of federal tax policy, which has brought down the top tax rate and made other changes that benefit corporations and the wealthy