One question is how, exactly, to apply Mr. Biden’s campaign promise that no one earning less than $400,000 a year would pay more in federal taxes under his plan. Currently, the top marginal income tax rate starts at just above $500,000 for individuals and above $600,000 for couples. Mr. Biden proposed raising that rate during the campaign.
Mr. Biden’s advisers say they are committed to not raising the tax bills of any individual earning less than $400,000. But they have debated whether to lower the income threshold for the top marginal rate, to tax all individual income above $400,000 at 39.6 percent, in order to raise more revenue for his spending plans.
Mr. Biden’s broader economic agenda will face a more difficult road in Congress than his relief bill, which was financed entirely by federal borrowing and passed using the special parliamentary tactic. Mr. Biden could again try to use that same budget reconciliation process to pass a bill on party lines. But moderate Democrats in the Senate have insisted that the president engage Republicans on the next wave of economic legislation, and that the new spending be offset by tax increases.
Large business groups and some congressional Republicans have expressed support for some of Mr. Biden’s broad goals, most notably efforts to rebuild roads, bridges, water and sewer systems, and other infrastructure. The U.S. Chamber of Commerce and the National Association of Manufacturers have both spoken favorably of spending up to $2 trillion on infrastructure this year.
But Republicans are united in opposition to most of the tax increases Mr. Biden has proposed. Business groups have warned that corporate tax increases would scuttle their support for an infrastructure plan. “That’s the kind of thing that can just wreck the competitiveness in a country,” Aric Newhouse, the senior vice president for policy and government relations at the National Association of Manufacturers, said last month.
Administration officials are considering offering as part of their plans to extend some 2017 tax breaks that are set to expire, like the ability to immediately deduct new investments, in order to win business support.
Top business groups have also expressed an openness to Mr. Biden breaking up his Build Back Better agenda to pass smaller pieces with bipartisan support.
“If you try to solve every major issue in one bill, I don’t know that’s a recipe for success,” Neil Bradley, the executive vice president and chief policy officer at the U.S. Chamber of Commerce, said in an interview last month. “These don’t have to be done in one package.”