There are no tax hikes in the “bipartisan” infrastructure bill President Biden negotiated with some key senators last week. But tax hikes are probably coming all the same.

Biden is engaged in political jujitsu with a handful of Senate Republicans who want to get credit for supporting an infrastructure deal without appearing to enable other Democratic priorities. Biden threw them off balance on June 24 by linking the bipartisan bill to a second, Democratic-only measure likely to contain dozens of programs Republicans would never agree to. Biden basically said he’d sign both, or neither. That made Republicans look like dupes, and they squealed, risking support for the bipartisan bill.

A few days later Biden blinked, saying he’s not linking the two bills, after all. That gave Republicans cover to recommit to the bipartisan bill. Yet everybody in Washington knows Democrats still plan to do exactly what Biden outlined on June 24: Pass a bipartisan infrastructure bill with at least 10 Republican senators, to overcome a filibuster, then use the Senate “reconciliation” process to pass another bill with all the goodies Republicans won’t vote for.

It’s that second reconciliation bill that will contain the tax hikes Biden wants to impose on businesses and the wealthy. Overall, Biden is calling for nearly $4 trillion in additional spending on social welfare, infrastructure, green energy and many other priorities. The bipartisan bill would include about $1.2 trillion in new spending, more than $2 trillion short of Biden’s goal. So the partisan reconciliation bill could target $2 trillion or so in spending, and more if progressives like Sen. Bernie Sanders get their way.

The likeliest tax increases

That bill will also include tax hikes to pay for some or most of the new spending. Three tax hikes seem especially likely. The first is a business tax hike. Biden wants to raise the corporate tax rate from 21% to 28%, but a few Democrats say 28% is too high. Sen. Joe Manchin of West Virginia—the key swing vote among Democrats—says he could live with a 25% rate. That’s the informal target for Democrats, now.

Biden also wants to raise the top individual income tax rate from 37% to 39.6%, which was the rate before Republicans cut it in 2017. That would only affect Americans earning more than $510,000, and it’s popular with voters. Democrats shouldn’t have a hard time doing that.

Third is the capital-gains tax rate. Biden wants to raise it from a top rate of 20% to 39.6% for people earning more than $1 million per year. Some Democrats think that is too high, which means there probably aren’t enough votes for that to squeak past very narrow Democratic majorities in both houses. But handicappers think a compromise of around 28% is possible. “We continue to think the odds favor a $1-$2 trillion package passing through reconciliation that modestly increases taxes on capital, corporation and high earners,” analyst Isaac Boltansky of Compass Point Trading & Research explained in a June 28 research note.