Biden proposes the HIGHEST personal income tax rate since 1986 in $6.8 trillion budget
Biden proposes HIGHEST personal income tax rate since 1986 with $6.8 trillion budget, could push national debt to $51 trillion by 2033
- The $6.8 trillion blueprint, which has no chance of passing Congress, calls for an increase in the top income tax rate from 37 to 39.6 percent
- Other changes include raising the federal corporate tax rate from 21 to 28 percent and quadrupling the stock buyback tax rate to four percent
- The budget would grow 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 income tax rate in nearly 40 years.
The $6.8 trillion blueprint, which has no chance of passing Congress, calls for an increase in the top income tax rate from 37 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 earning $1 million or more from 20 percent to 39.6 percent and apply an additional surcharge to fund Medicare, raising rates. up to 45 percent.
Other changes include raising the federal corporate tax rate from 21 to 28 percent and quadrupling the stock buyback tax rate to four percent.
The budget would increase the national debt from $31.4 trillion to about $51 trillion over the next decade. But if passed, the White House says the deficit would be about $3 trillion lower compared to current spending levels.
Biden called Donald Trump ‘might be the future president’ to a disapproving audience in Philadelphia as he spoke of his recently released $6.8 trillion budget
The proposal also calls for closing the “carried interest loophole” for private fund managers and punishing those who have income or assets that amount to $100 million or more with a minimum tax of 20 percent on unrealized gains.
Under current law, mutual fund managers can pay a 20 percent 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 Medicare’s solvency for another 25 years.
That would mean the wealthiest Americans would pay a 44.6 percent federal tax rate on investment income and other income.
The bill called for a minimum tax rate of 25 percent for households worth $100 million or more — 0.01 percent of the population.
Biden’s budget would also eliminate a tax break for crypto losses and limit the amount high earners can hold in retirement accounts meant for the middle class like Roth.
It would also eliminate a tax break for real estate investors that currently does not pay taxes on real estate gains if they reinvest it back into the market, and eliminate tax breaks for oil and gas companies.
However, the budget would extend the child tax credit to pandemic levels — $3,600 for children under six and $3,000 for older children, up from $2,000. It would also expand the employed person’s tax credit for low-income workers without children.
In exchange for higher taxes, the budget provides a huge cash injection for social programs such as childcare and paid family leave.
Enough for the largest peacetime budget in history has also been proposed – including $842 billion for the Pentagon, a 5.2 percent wage increase for troops, $6 billion for aid to Ukraine and Europe, and $37 billion for the nuclear weapons program.
Billions have also been earmarked for a 5.2 percent pay increase for federal employees, aid for refugees, more offshore wind farms and a $25 billion investment in border security.
It calls for $688 billion in non-defense discretionary spending — that is, money for programs that are not mandatory, such as Social Security and Medicare. That’s an increase of $47 billion over last year’s budget.