Republicans accuse Joe Biden of 'economic sabotage' over plans for massive tax raid on wealthy Americans

Joe Biden will mark his first 100 days in office by proposing a massive tax raid on America's wealthy to fund multi-trillion dollar spending programmes, setting up a battle with Republicans, Wall Street and Silicon Valley.

The US president was expected to use his first speech to a joint session of Congress on Wednesday night to detail his plans for controversial increases in capital gains tax, corporation tax and income tax.

Republicans have called the plans "economic sabotage" while business figures said it threatened to "kill the golden goose that is America."

Mr Biden will reach 100 days in office on Thursday. In his speech the evening before he will set out his $1.8 trillion "American Family Plan" to provide national child care, paid family leave and free community college.

It comes on top of his proposed $2.3 trillion infrastructure bill, and his already passed $1.9 trillion coronavirus relief package.

His level of spending has led to comparisons with President Franklin D Roosevelt and the 1930s New Deal.

The family plan will be partly paid for by increasing taxes on profits earned from shares and other investments like property owned by Americans earning over $1 million a year.

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Some could see their tax rate on those investments roughly doubling to 43.4 per cent, the highest since the 1920s, according to the Tax Foundation, an independent research group.

The White House said the move would only affect 500,000 people, or about 0.3 per cent of taxpayers.

Brian Deese, head of the White House National Economic Council, said: "It's not the top one per cent, it's not even the top one half of one percent.

"We believe that it's not only fair... but would help invest directly in our kids and our families."

Mr Biden's infrastructure plan is set to be partly funded by increasing corporation tax from 21 per cent to 28 per cent.

He also plans to raise the top rate of income tax from 37 per cent to 39.6 per cent for those earning over $400,000.

In addition, the president plans to clamp down on tax loopholes for the estates of wealthy families.

He will announce a huge investment in the Internal Revenue Service, increasing its budget by up to $80 billion over 10 years.

That will allow it to audit the taxes of wealthy individuals, raising hundreds of billions of dollars in revenue.

In 2017 Donald Trump slashed various taxes.

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Republicans and business leaders have expressed opposition to any increases, and said Mr Biden's proposed hike in capital gains tax could discourage private investment.

Congressman Kevin Brady, the leading Republican on the House tax committee, said: "This is another economic blunder by the Biden Administration. It punishes investment in local businesses.

"The result will be slower growth... sabotaging not only our economic recovery but also future growth."

Chris Christie, the former Republican presidential candidate, said it showed Mr Biden was a "far-left president". He said: "It is nothing more than income redistribution. It’s socialism."

Mr Biden faces potential opposition from moderate Democrats in the Senate, where the party's majority is on a knife edge.

Joe Manchin, the conservative Democrat senator from West Virginia, has already objected to raising corporation tax to 28 per cent to pay for new infrastructure.

Meanwhile, left-wing Democrats including Senator Bernie Sanders, have pushed for a 35 per cent corporation tax.

Mr Biden also plans to increase the minimum wage for hundreds of thousands of federal contractors, including cleaners, maintenance and cafeteria workers, from $10.95 to $15 per hour.

According to a Reuters/Ipsos poll 55 per cent of Americans approve of Mr Biden's performance in his first 100 days.

That included 65 per cent approval for his handling of the pandemic, and 42 per cent for how he has dealt with the Mexico border.