Biden proposes the HIGHEST personal income tax rate since 1986 on a $6.8 trillion budget that could see the national debt rise to $51 trillion by 2033
- The $6.8 trillion spending plan, which has no chance of passing Congress, calls for raising the top income tax rate from 37 to 39.6 percent.
- Other changes include increasing the federal corporate income tax rate from 21 to 28 percent and quadrupling the share repurchase tax rate to four percent.
- The budget would increase the national debt from $31.4 trillion to about $51 trillion over the next decade.
President Biden proposed nearly $5.5 trillion in new taxes and the highest personal income tax rate in nearly 40 years.
The $6.8 trillion spending plan, which has no chance of passing Congress, calls for raising the top income tax rate from 37 percent to 39.6 percent.
One of Biden’s biggest proposed changes to the tax code would be to nearly double the capital gains tax rate for people making $1 million or more from 20 percent to 39.6 percent and place an additional surcharge to fund Medicare. , raising rates up to 45 percent.
Other changes include increasing the federal corporate income tax rate from 21 to 28 percent and quadrupling the share repurchase tax rate to four percent.
The budget would increase the national debt from $31.4 trillion to about $51 trillion over the next decade. Still, if enacted, the White House says the deficit would be about $3 trillion lower compared to current spending levels.
Biden dubbed Donald Trump ‘maybe the future president’ before a disapproving audience in Philadelphia, where he discussed his newly released $6.8 trillion budget.
WHAT ELSE IS IN THE BIDEN BUDGET
- $6 billion in support for Ukraine and Europe
- $37.7 billion for nuclear weapons
- $17.8 billion for violent crimes
- 5.2 percent pay increase for troops
- $40 million to combat fentanyl trafficking
- $26 billion to strengthen the border: an increase of $800 million over 2023
- $535 million for technology at border entry points
- Funds to hire an additional 350 border agents
- $3 billion to help poor countries deal with global warming
- Funding for 100,000 police officers across the country
The proposal also calls for closing the “earned interest loophole” for private fund managers and punishing those with income or assets totaling $100 million or more with a minimum 20 percent tax on unrealized gains.
Under current law, mutual fund managers can pay a 20 percent capital gains tax rate on a portion of their income instead of being subject to the 37 percent rate.
The president is also proposing to increase the Obamacare tax from 3.8 percent to 5 percent for those who earn at least $400,000 to add to the Medicare Trust Fund. Biden says the new levies would extend the solvency of Medicare for another 25 years.
That would mean the wealthiest Americans would pay a 44.6 percent federal tax rate on investment income and other earnings.
The proposal required a minimum tax rate of 25 percent for homes worth $100 million or more: 0.01 percent of the population.
Biden’s budget would also remove a tax break for crypto losses and limit the amount high-income earners can hold in retirement accounts meant for the middle class like Roth.
It would also remove a tax break for real estate investors that currently allows them to avoid paying taxes on real estate gains if they reinvest them in the market, as well as remove tax breaks for oil and gas companies.
However, the budget would expand the child tax credit to pandemic levels: $3,600 for children under six and $3,000 for older children, instead of $2,000. It would also expand the earned income tax credit for low-income workers without children.
In exchange for higher taxes, the budget provides a large injection of funds for social programs like child care and paid family leave.
Enough has also been proposed for the largest peacetime budget in history, including $842 billion for the Pentagon, a 5.2% pay increase for troops, $6 billion in support for Ukraine and Europe and $37 billion in the nuclear weapons program.
There are also billions set aside for a 5.2 percent pay increase for federal workers, refugee support, more offshore wind farms and a $25 billion investment in border security.
It requires $688 billion in discretionary non-defense spending, which means money for non-mandatory programs like Social Security and Medicare. That’s a $47 billion increase over last year’s budget.