US may raise taxes on companies, wealthy

US Treasury Secretary Janet Yellen has indicated that the administration is considering raising taxes on the wealthy and companies to fund an expected huge spending package centering on infrastructure projects.

Yellen was speaking at a hearing of US House of Representatives on Tuesday.

She said that a package, which consists of investments in people and infrastructure, will help to create good jobs in the American economy. She added that changes to the tax structure will help to pay for those programs.

US media expect the package to be worth 3 trillion-dollars. It will likely entail projects to repair roads and bridges as well as programs to set up charging stations for electric vehicles as part of efforts to combat climate change.

Economists say the administration will likely study a possible tax reform as the package may deteriorate the fiscal health. The administration has already been implementing a 1.9 trillion-dollar coronavirus relief package.

But it remains to be seen how tax increases would affect the economy that has been reeling from the ramifications of the pandemic. Proposals of tax hikes could also spark strong opposition from Republicans.

The preceding administration of President Donald Trump reduced the corporate tax and the income tax on the well-off.