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This week in Bidenomics: The rich will survive

Yahoo Finance’s Rick Newman joined Yahoo Finance Live to break down this week in Bidenomics.

Video Transcript

- We want to get to-- turn, I guess, back to DC, some of the developments that we got this week, House Democrats unveiling a plan that they say would raise $2.1 trillion over a decade. And they're doing it by taxing the wealthy and raising the tax rate on corporations. It's the subject of this week's Bidenomics report, so of course we need to bring in Rick Newman for a little bit more on this. And Rick, just last hour, we spoke to Representative Kevin Brady. No surprise, clearly he is very opposed to the plan that the Democrats did put forward. But from your perspective, I guess what do you think we'll likely end up with?

RICK NEWMAN: Well, if I were a one percenter, I'd be feeling a bit of relief at this point. So I know it's hard to follow all the moving pieces here, but we got an important part of the puzzle this week, which was this layout of the proposed tax hikes from the House Ways and Means Committee. Those are the guys who write the tax laws. And they gave us a pretty good preview of what could be in a final bill, and it's not as bad as a lot of the things Biden himself has proposed or other Democrats would like to see.

So just to tick off a couple of examples, there's no wealth tax in there. Of course, that's something Bernie Sanders and Elizabeth Warren and some others say we need to address wealth inequality, but it's not going to happen. The-- Biden wants to raise the capital gains tax rate on investment gains all the way up to 39.6%, but the House Democratic plan would only push the top rate from 20% to 25%. The corporate tax rate is another one. Biden wants to push it to 28%, but the House plan would only push it to 26.5%.

And I think something important for people to keep in mind is these provisions are not likely to get stricter. If anything, these provisions are likely to get weaker. So these were the opening bids that the Democrats put on the table, and they're just not nearly as-- they would not tax the wealthy or businesses as much as a lot of the Democratic rhetoric would suggest, or as much as even Biden himself wants to do.

- All right. Rick Newman, thanks so much for breaking that down for us. And of course, you can catch Rick's column on YahooFinance.com. Have a great weekend, Rick.