US President Joe Biden (C) comments on the February jobs report with Council of Economic Advisers Chair Cecilia Rouse (L) and National Economic Council Director Lael Braind in the Roosevelt Room of the White House on March 10, 2023 in Washington, DC Are.
Alex Wong | Getty Images News | Getty Images
President Joe Biden released him 2024 budget plan Thursday that promises to cut the deficit by $3 trillion over the next decade through a flurry of new and increased taxes aimed at the richest Americans.
The proposal is only the first step in the federal government’s budgetary process and in its current form is unlikely to be enacted in the face of a divided Congress given that Republicans hold a majority in the House of Representatives.
Many of the proposed taxes are more of a messaging signal as the president prepares to launch a potential re-election bid and enter the 2024 campaign season.
Where is the money coming from? Here’s a look at the biggest revenue-generating taxes outlined in the plan.
All revenue numbers are in the next decade period.
Raising the corporate tax rate to 28%: $1.326 trillion
Biden’s budget calls for raising the corporate income tax from the current 21% to 28%. The White House argues that the increase is still well below the 35% tax before former President Donald Trump cut the tax in 2017.
Ensuring companies “are paid their fair share” has been a priority for Biden since his campaign and is likely to take center stage on his platform if he decides to run again. The president’s economic platform is a direct criticism of so-called “trickle-down economics” theories focused on building an economy “from the bottom up and out of the middle”. Raising taxes on the highest earners, including large corporations, is central to its implementation.
Impose a minimum income tax of 0.01%: $436.61 billion
Biden’s budget calls for a minimum tax of 25% on American households worth more than $100 million, which would be more than three times the 8% rate currently paid by the richest 0.01%.
“No billionaire should pay a lower tax rate than a school teacher or a firefighter,” Biden said in a speech in Philadelphia, Pa., on Thursday after the release of his budget proposal. He said there are currently more than a thousand billionaires in the United States, up from 600 when he took office two years ago. The White House argues that those Americans should contribute more.
Read more on Biden’s FY 2024 budget plan:
ACA tax raise for the wealthy: $344.37 billion
Biden’s budget calls for raising the 3.8% Affordable Care Act tax on Americans earning more than $400,000 to 5%. This increase will go towards promoting Medicare.
Close ACA tax loophole: $305.94 billion
This is another reform that will help give Medicare the edge. If enacted, it would close a loophole to ensure that the Obamacare tax always applied to high-income so-called “pass-through businesses,” where the income flows into personal returns.
Raise top marginal income tax: $235.26 billion
Creating the billionaires tax, Biden’s budget raised the top payroll tax rate from 39.6% to 37% on Americans making more than $400,000 annually and married couples making more than $450,000. If enacted, the income tax hike would reverse a cut proposed by former President Donald Trump in his 2017 tax bill.
Quadruple the stock buyback tax: $237.91 billion
The new levy, which imposes a 1% tax on all stock buybacks, was passed under last year’s Inflation Reduction Act and went into effect on January 1. It is expected to raise $74 billion over the next ten years. However, the president argues that this is not enough to curb share buybacks and has proposed a four-fold increase in the tax to 4% in his budget. The White House says the move will encourage investment in the businesses themselves, rather than repurchases and dividend sharing.