The White House said Wednesday that President Joe Biden’s budget blueprint will seek additional tax increases and cut $3 trillion from the federal deficit over 10 years.
Biden, 80, will outline the whole proposal ahead of a trip to Philadelphia on Thursday, despite the fact that the House of Representatives is controlled by Republicans who oppose tax hikes.
Proposed Tax Hikes
This signifies that the most contentious policy proposals will serve as political rhetoric rather than become law. According to Biden’s press secretary, Karine Jean-Pierre, his budget proposal will reduce family spending, invest in the United States, and safeguard programs for which Americans have paid.
Jean-Pierre dodged questions regarding a 5.2% pay hike for federal employees, the largest since the Carter administration, and a 20% minimum tax on income and unrealized gains from liquid assets like as stocks for families with a net worth of more than $100 million.
Tuesday, the president outlined a plan to increase Medicare taxes from 3.8% to 5% for anyone earning above $400,000 annually.
The Medicare tax increase would also close a loophole that Biden exploited in 2017 and 2018 to avoid paying up to $500,000 in Medicare taxes by routing a large portion of his income, including speaking fees and book-sale proceeds, through an S corporation.
Biden may also revive proposals to increase the top personal income tax rate from the current 37% to 39.6% and to increase corporate taxation from 21% to 28%.
Biden and House Republicans are embroiled in a fiscal debate, with House Speaker Kevin McCarthy (R-California) seeking expenditure cutbacks before agreeing to extend the United States debt ceiling later this year.
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Biden’s Reduction Alternatives
Biden commonly mistakes deficit, which refers to the annual budget gap, with debt. The national debt has increased by $3.85 trillion due to Biden’s actions.
During former President Donald Trump’s four years in office, the economy grew by $7.8 trillion, including important bipartisan COVID-19 legislation.
In 2021, when Biden took office, the deficit was $2.77 trillion, down from an all-time high of $3.13 trillion in 2020. The deficit for the fiscal year 2022 was $1.38 trillion, the fourth-highest ever.
Under Biden, the $1.9 trillion stimulus program and the $739 billion environmental and healthcare bills passed without Republican support. Obama signed a bipartisan $1.2 trillion infrastructure bill, a $280 billion CHIPS and Science Act, and a $270 billion veterans healthcare bill.
The practically underfunded plan prioritized demand-side stimulus over-investment in the fight against the COVID-19 pandemic.
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