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House Ways and Means Chairman Richard Neal (D-Mass.) Photo: Tom Williams/CQ Roll Call

House Democrats will consider as much as $2.9 trillion in tax hikes for the next 10 years — mostly on the extremely wealthy and corporate America — as they scramble for ways to pay for President Biden's $3.5 trillion infrastructure and social spending plan.

Why it matters: A draft proposal from the Ways and Means Committee, which ricocheted across Washington on Sunday night, previews epic fall fights between Democrats and some of the best-armed lobbies in America.

Driving the news: The summary, first reported by The Washington Post, includes a top personal rate of 39.6%, up from 37%, which would raise $170 billion over 10 years.

  • Democrats are looking to raise $1 trillion from the wealthiest Americans and $900 billion from corporate America.
  • While Biden has defined the “rich” as any individual or household that makes more than $400,000, the Democratic plan draws the line for individuals at $400,000; households at $425,000; and married couples at $450,000. 

By the numbers: The top capital gains rate would increase to 25% from 20% — raising some $123 billion.

  • Changes to what qualifies as investment income, some of which is already subject to a 3.8% Affordable Care Act tax, would make the effective capital gains rate 28.3%, raising $252 billion. 
  • Accelerating the end of the $24 million estate tax exemption would bring in another $50 billion.
  • Imposing an additional 3% tax on Americans who make more than $5 million would raise $127 billion.
  • Expanded restrictions on carried interest impacting how private equity firms compensate employees could bring another $14 billion.
  • The pharmaceutical industry could be forced to foot $700 billion of new spending by negotiating rates directly with Medicare.

Add these provisions and others up and you get to $2.9 trillion.

  • Then the plan counts $600 billion from so-called dynamic scoring, based on an assumption that the proposed policy changes will accelerate economic growth and therefore revenues. That's how Democrats could get to $3.5 trillion, at least on paper.

The big picture: While the menu gives Democratic lawmakers options, it also forces them to take sides on everything from a 3% surcharge on the uber-rich to a 26.5% corporate tax rate.

  • There's already a raging argument over the top line spending figure, with Sen. Joe Manchin (D-W.Va.) settling between $1 trillion and $1.5 trillion, and Sen. Bernie Sanders (I-Vt.) calling anything short of $3.5 “totally unacceptable.”
  • Substantive policy differences between the House and the Senate could become as important, with Sen. Mark Warner (D-Va.) threatening Sunday night to vote against the budget package over homeownership concerns.

Go deeper

Felix Salmon, author of Capital
Updated Sep 17, 2021 - Economy & Business

America fought the pandemic economy — and won

Illustration: Sarah Grillo/Axios

The U.S. economy is emerging from the pandemic with more well-paying jobs for those who want them, less hunger, less poverty, higher wages, less inequality, and more wealth for everyday Americans.

Why it matters: None of these outcomes were expected when the pandemic began. All of them are the result of massive government programs.

The Exvangelicals

Illustration: Aïda Amer/Axios

Even as evangelicals maintain their position as the most popular religion in the U.S., a movement of self-described "exvangelicals" is breaking away, using social media to engage tens of thousands of former faithful.

The big picture: Donald Trump's presidency, as well as movements around LGBTQ rights, #MeToo and Black Lives Matter, drew more Americans into evangelical churches while also pushing some existing members away.

Updated 5 hours ago - Science

Huge wildfire reaches edge of Sequoia National Park

A plume of smoke and flames rise into the air as the fire burns towards Moro Rock during the KNP Complex fire in the Sequoia National Park near Three Rivers, California, on Saturday. Photo: Patrick T. Fallon/AFP via Getty Images

Firefighters in Sequoia National Park were working into the night after two wildfires merged to reach the Giant Forest Saturday.

Why it matters: This forest contains over 2,000 giant sequoias, including the General Sherman Tree — the world's largest tree by volume. Park officials wrapped the redwoods in foil last week as the Paradise and Colony Fires, now known as the KNP Complex Fire, neared. Protection efforts appeared to be working overnight.