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Report: Biden planning first major tax increase in three decades

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President Joe Biden is reportedly planning the first major federal tax increase in almost three decades to help bankroll the long-term economic program set up to follow his $1.9 trillion COVID-19 stimulus package he signed last week, unidentified people familiar with the matter told Bloomberg in a Monday report.

The reported plans would be the first major tax increase since President Bill Clinton‘s 1993 overhaul.

The tax hike proposals reportedly either under consideration or currently planned include: raising the corporate tax rate to 28% from 21%; raising the income tax rate on individuals making over $400,000; paring back tax preferences for pass-through businesses, such as limited-liability companies or partnerships; expanding the estate tax; and establishing a higher capital gains tax rate for people making at least $1 million annually.

On the campaign trail, Biden had said he would repeal former President Donald Trump‘s tax cuts on “day one” of his administration, though he has yet to follow through a little over 50 days after taking office. Since becoming president, much of his and Democrats’ attention have been on Trump’s second impeachment trial, COVID economic relief, Cabinet confirmations, among many other things.

Since Trump’s massive tax cuts were passed in 2017, something Republicans overwhelmingly consider a major achievement for the former president, the cuts have been the target of many Democrats’ ire, becoming a boogeyman of sorts for them. “[T]he worst bill in the history” of Congress, then-House Minority Leader Nancy Pelosi (D-Calif.) labeled the tax legislation in late 2017.

Seeing how Biden’s $1.9 trillion American Rescue Plan faced massive hurdles posed by moderate senators in his own party, in a chamber the Democrats control by the slimmest of margins, there are signs that a tax hike would face a rocky road to passage.

MORE ON COVID RELIEF: House approves $1.9T COVID relief bill, Biden set to sign Friday

West Virginia Sen. Joe Manchin (D), a moderate, told The Hill in January that repealing Trump’s 2017 tax cuts would be “ridiculous”. Though, as the publication noted, Manchin walked back his comments, saying, “Everything’s open for discussion.”

MORE ON SEN. MANCHIN: Sen. Sinema breaks with Democrats on $15 minimum wage

Any tax hikes that are passed would likely take effect starting in 2022, according to Bloomberg, which pointed out that some lawmakers have urged the administration to hold off due to pandemic-related unemployment remaining high.

Late last month for example, Montana Sen. Jon Tester (D) warned that lawmakers ought to be careful about raising taxes when the real unemployment rate at the time was estimated to be as high as 10%, per The Hill.

“I think there are some loopholes in the code that could be cut out. I don’t know that you want to do it right now,” he said.

You can follow Douglas Braff on Twitter @Douglas_P_Braff.

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House inquiry opened as to whether IRS is using artificial intelligence to invade Americans’ financial privacy

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An inquiry has been opened by the House Judiciary Committee as to whether the IRS is using artificial intelligence to invade Americans’ financial privacy. The inquiry comes after an agency employee was captured in an undercover tape suggesting there was a widespread surveillance operation underway that might not be constitutional, reports Just the News.

The inquiry was opened by Committee Chairman Jim Jordan, R-Ohio, and Rep. Harriet Hageman, R-Wyo., who sent a letter to Treasury Secretary Janet Yellen demanding documents, and answers as to how the agency is currently employing artificial intelligence to comb through bank records to look for possible tax cheats.

The House Judiciary Committee has been investigating why the FBI was obtaining Americans’ bank records, including those who partook in the January 6 Capitol riots, without using search warrants or subpoenas.

Jordan’s and Hageman’s letter said lawmakers have evidence and reason to believe that the IRS and Department of Justice (DOJ) are actively monitoring millions of Americans’ private transactions, bank accounts, and related financial information—without any legal process—using the AI-powered system.

“This kind of pervasive financial surveillance, carried out in coordination with federal law enforcement, into Americans’ private financial records raises serious doubts about the IRS’s—and the federal government’s—respect for Americans’ fundamental civil liberties,” the letter said.

“So one of the things that I have learned since I’ve been in Congress is that there are quite a few people in government who do not recognize our constitutional protections,” Hageman told Just the News. “They’ve kind of forgotten or at least ignored our Bill of Rights.”

Just the News also reported that the Treasury Department has since acknowledged it has “implemented an enhanced process using AI to mitigate check fraud in near real-time by strengthening and expediting processes to recover potentially fraudulent payments from financial institutions’ since late 2022.”

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