Elgin Area Chamber Of Commerce: Democrats Propose Tax Increases, Office Use Down, Consumers Brace For Inflation

Press release from the Elgin Area Chamber of Commerce:

September 14, 2021

Democrats Propose Tax Increases, Office Use Down, Consumers Brace for Inflation

What You Need To Know To Start Your Day

Democrats have proposed tax increases to help pay for President Biden's proposal for soft infrastructure. (Getty Images)
 

By Richard Lawson
CoStar News
 

Democrats Propose Tax Increases
 

Lawmakers have started tackling how to pay for President Biden’s proposed $3.5 trillion spending bill on what’s been described as “soft infrastructure,” often considered services needed to preserve a standard of health and welfare, through a variety of tax hikes that include capital gains.
Democrats have proposed raising the rate on long-term capital gains to 25% from 20% in a proposal lower than Biden’s idea earlier this year to raise the rate to 39.6%. Former President Donald Trump had tried cutting the tax rate to 15%.

The total burden would rise to 28.8% with a 3.8% surcharge on net investment income. Those earning less than $400,000 wouldn’t be hit with the increase. The capital gains tax increase is part of a set of higher taxes Democrats proposed on Monday to raise $2 trillion in new revenue over the next decade.

With their plan, the top marginal rate would increase from 37% to 39.6% for those making more than $523,000. Under the plan, they propose a bump in the corporate tax rate from 21% to 26.5% for firms earning more than $5 million in annual income.
Office Use Down
Office use edged a little lower last week with workers scooting elsewhere for Labor Day. Major metropolitan areas where Falls Church, Virginia-based security firm Kastle Systems has clients showed mostly small declines in office usage for the week that ended Sept 8.

Kastle gathers anonymous employee data from workplaces where it provides access-control technology. While it is only a sampling of buildings by one security company, the data gives a peek into how employees and employers are responding to office use during the pandemic, particularly now with a fast-spreading coronavirus variant of the coronavirus.

The four largest metropolitan areas in Texas, including Dallas, Austin, Houston and San Antonio, declined for the week. Bridgeport-Stamford-Norwalk, Connecticut, had the most significant drop, however, falling 7.1 percentage points to 38.2%. The area had been on the rise for weeks until the delta variant surge stalled a return to the office for some.

Consumers Expect Higher Inflation
Consumer inflation expectations hit a record high for the New York Federal Reserve Bank’s monthly survey in August.

Consumers expect higher inflation in the short-term and medium-term, according to the survey. They see inflation hitting 5.2% over the next year and 4% over the next three years. Meanwhile, views on maintaining employment and earnings were largely positive. Fear of losing their jobs remains at a low for the survey.

Even so, the perceived probability of finding a job if they lost their current one declined. “The decrease was most pronounced among respondents aged 60 and over,” the fed’s report said.

Source: CoStar Group, www.costar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.