President Biden released his election-year budget proposal on Monday, calling for $5.5 trillion in tax increases through higher rates on the wealthy and big corporations, while cutting back on federal benefits programs, affordable housing and student loans. He called for an increase in spending on things like write-offs.
The 2025 budget is highly unlikely to be approved by Congress, but it would match last year’s highest level of tax increases and make massive investments that are said to reduce the federal deficit by $3 trillion over the next 10 years. The White House announced on Monday. .
Brian Riedl, a senior fellow at the Manhattan Institute who specializes in budget and taxes, told the Post in an interview on Friday that Biden’s similar plan last year was “the highest peacetime burden in U.S. history and the highest persistence in U.S. history.” We are presenting taxes,” he said. American history. “
“Not only is the president raising taxes, but he’s using a significant portion of that money for new spending rather than deficit reduction, which means even bigger tax increases will come when it’s time to get the deficit under control,” Riedl said. “I will.”
The White House attacked Congressional Republicans for supporting the 2017 Tax Cuts and Jobs Act under President Donald Trump, saying the bill contained “gifts” to “wealthy individuals and corporate tax fraud recipients.” accused of being
Biden, 81, announced some of his budget proposals during his State of the Union address Thursday night, including raising the corporate income tax rate to 28% and increasing the minimum corporate tax rate from 15% to 21%.
He also called for a mortgage interest tax credit of more than $400 per month and a 25% tax on billionaires with a net worth of more than $100 million.
“As you know, there are 1,000 billionaires in America. Do you know what the average federal tax is on these billionaires? They’re making a huge sacrifice, 8.2%,” Biden said. said derisively, adding that tax increases would “raise $500 billion over the next 10 years.”
“Under my plan, people making less than $400,000 a year will not pay a penny more in federal taxes,” he added. “No one. Not a penny. And they haven’t yet.”
Riedl said that claim had been “widely debunked” and claimed that the 8% tax rate was “essentially fabricated by White House economists.”
“They’re not counting the corporate and estate taxes that wealthy people pay, but they’re expanding their income to include all sorts of things like unrealized capital gains that will be taxed in the future,” Riedl said.
“America has the most progressive tax code in the entire world. [Organization for Economic Co-operation and Development] And billionaires don’t pay the 8% tax rate. ”
The president’s budget also includes an unprecedented $258 billion investment in affordable housing and a new tax credit of up to $10,000 for first-time homebuyers.
“Tax credits only respond to rising home prices by further subsidizing demand, which only increases home prices even more and negates much of the savings for families,” Riedl said of the provision. .
Another item touts the full reinstatement of the child tax credit of up to $3,600 enacted in Biden’s American Rescue Plan and other tax cuts for low- and middle-income Americans amounting to $765 billion over the next 10 years. .
The budget adds $8.5 billion to federal food benefits programs, most of which will go to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
After already canceling $137 billion in student loan debt for 3.7 million borrowers, the budget also cuts college costs, eliminates student loan origination fees, and provides $3.7 billion in other student loan cancellation measures for state and local governments. is proposing $12 billion to incorporate into its safety proposals. .
Tens of billions more will be invested in veterans benefits programs to help hire and retain educators and support students in schools across the country, four years after the COVID-19 pandemic began. There are also plans to do so.
Another $2.7 billion will be set aside for the Office of Federal Student Aid to support student loans.
Ahead of Biden’s speech to Congress, House Budget Committee Chairman Jody Arrington (R-Texas) announced a budget resolution that would reduce the deficit by $14.2 trillion and add $45 billion to the budget surplus. did.
“As the situation for our nation’s unions deteriorates rapidly, President Biden must make tough decisions to confront the reality of our unbalanced budget and weak economy,” said House Speaker Mike Johnson (R-Louisiana). “We proved that we have no intention of giving up.” ) said in a statement regarding the proposal.
“Reckless spending and economic damage by this administration and long-standing Democratic administrations has increased everyday expenses for Americans.”
