Biden reveals $7.3T budget, includes $5.5T in tax hikes, record-high taxes in U.S
OAN’s James Meyers
1:33 PM -Monday, March 11, 2024
President Joe Biden has unveiled his election-year budget plan, which proposes $5.5 trillion in tax increases by raising rates on prosperous companies, including billionaires, who would be required to pay a minimum 25% tax rate.
Biden’s budget proposal for fiscal year 2025, amounting to $7.3 trillion, aims to reduce the federal deficit by nearly $3 trillion, according to the White House. The plan also includes limitations on corporate profit sharing.
According to Brian Riedl, a senior fellow at the Manhattan Institute focusing on budget and taxes, the new budget will result in “the highest sustained taxes” ever in the United States.
“The highest peacetime burden in American history, as well as the highest sustained taxes in American history.”
“Not only is the president raising taxes, but he’s using a substantial portion of it for new spending rather than deficit reduction, which just means even bigger tax hikes down the road when it’s time to rein in the deficit,” Riedl said.
This comes after Biden mentioned the newest budget plans in his State of the Union Address, which included raising the income tax rate for corporations to 28% and increasing the minimum corporate tax rate from 15% up to 21%.
“You know, there are 1,000 billionaires in America. You know what the average federal tax is for these billionaires? They are making great sacrifices: 8.2%,” Biden said mockingly, adding that his tax hike would “raise $500 billion over the next 10 years.”
“Under my plan, nobody earning less than $400,000 a year will pay an additional penny in federal taxes,” he added. “Nobody. Not one penny. And they haven’t yet.”
However, Reidl argued that the White House “widely debunked” the 8% tax rate and that it was “essentially made up by White House economists.”
“They do not count the corporate and estate taxes paid by the wealthy, but they also expand their income to include all sorts of things like unrealized capital gains that will be taxed in a future year,” Riedl said.
“America has the most progressive tax code in the entire [Organization for Economic Co-operation and Development] and billionaires do not pay an 8% tax rate.”
However, budget requests typically do not become law, and Biden’s should not be an exception, with Republicans controlling the House and Democrats controlling the Senate.
Meanwhile, before Biden’s State of the Union speech, House Budget Committee Chairman Jodey Arrington (R-Texas.) released a budget resolution to reduce deficits by $14.2 trillion and add a budget surplus of $45 billion.
“At a time when the state of our union is in sharp decline, President Biden has proven he is unwilling to make the tough decisions to confront the reality of our nation’s unbalanced budget and weak economy,” House Speaker Mike Johnson (R-La.) said in a statement about the proposal.
“The reckless spending and economic damage done by this Administration and years of Democrats’ control has increased everyday costs for the American people.”
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How are experts and critics reacting to Biden’s budget proposal, particularly in terms of its potential impact on tax rates and deficit reduction
President Joe Biden Unveils Budget Plan with Significant Tax Increases
President Joe Biden has recently revealed his election-year budget plan, which proposes $5.5 trillion in tax increases. The plan aims to raise rates on prosperous companies, including billionaires, who would be required to pay a minimum 25% tax rate. This move is part of Biden’s efforts to reduce the federal deficit and generate revenue for various initiatives.
Biden’s budget proposal for fiscal year 2025, amounting to $7.3 trillion, aims to reduce the federal deficit by nearly $3 trillion, according to the White House. The plan also includes limitations on corporate profit sharing. However, experts are skeptical about the viability and potential impact of these proposed tax increases.
According to Brian Riedl, a senior fellow at the Manhattan Institute focusing on budget and taxes, the new budget will result in “the highest sustained taxes” ever in the United States. He highlights concerns about the president’s emphasis on new spending rather than deficit reduction, which may lead to even bigger tax hikes in the future.
The budget proposal follows Biden’s mention of these plans in his State of the Union Address. During the speech, Biden highlighted his intention to raise the income tax rate for corporations to 28% and increase the minimum corporate tax rate from 15% to 21%. He mockingly mentioned that billionaires in America currently pay an average federal tax of only 8.2%, emphasizing that his tax hike would aim to generate $500 billion over the next 10 years.
However, critics argue that the White House’s claim of an 8% tax rate paid by billionaires is misleading. Riedl asserts that this figure does not consider corporate and estate taxes paid by the wealthy. He also points out that the inclusion of unrealized capital gains in future years distorts the calculation of billionaires’ tax rates. Riedl claims that America already has the most progressive tax code in the Organization for Economic Co-operation and Development (OECD), and billionaires do not pay an 8% tax rate.
It is important to note that budget requests typically do not become law, and Biden’s proposal is likely to face challenges in Congress. With Republicans controlling the House and Democrats controlling the Senate, negotiations and compromises will be necessary to pass any budget resolution.
Meanwhile, prior to Biden’s State of the Union speech, House Budget Committee Chairman Jodey Arrington (R-Texas.) released a budget resolution to reduce deficits by $14.2 trillion and establish a budget surplus of $45 billion. This alternative budget plan emphasizes the need for tough decisions considering the current state of the union.
Overall, Biden’s budget proposal, with its significant tax increases, has stirred both support and skepticism. As the budget process unfolds in Congress, politicians from both parties will engage in rigorous debates and negotiations to shape the final outcome.
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